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> It boggles my mind that there are people supporting Apple in this. Boiling the argument down to "who" do you support is the 2 line news-byte version of it.

> It boggles my mind that there are people supporting Apple in this. Boiling the argument down to "who" do you support is the 2 line news-byte version of it. This is about the law, and has some pretty big implications. 1) The EU is essentially attacking a law made in 2003 in 2016. To do this retroactively for 13 years is far too long (imo). 2) If the EU wins the case, the money flows back to Ireland, in essence rewarding the country who was out of line to begin with.

objclxt 10y ago
> If the EU wins the case, the money flows back to Ireland, in essence rewarding the country who was out of line to begin with. Not entirely - any monies returned can legally only be used to pay back Ireland's national debt. The UK, Germany, and France are the biggest holders of Ireland's debt, so effectively the money is going back to them, albeit with Ireland benefiting by reducing its debt marginally.
- BenElgar 10y ago
  I don't believe that's true. It's merely a recommendation. Source: http://www.irishtimes.com/business/economy/european-commission-says-ireland-not-obligated-to-use-apple-tax-cash-for-national-debt-1.2774229 http://www.irishtimes.com/business/economy/european-commissi...
humanbeinc 10y ago
1) No it's not. If it's a break of contract with the EUs playbook of economic fairness amongst its members and therefor can be prosecuted forever. 2) Doesn't matter who gets the money. It's forcing corporations to not use Ireland as a tax haven anymore (there are others like Luxembourg, etc., but it's a step in the right direction)
- Silhouette 10y ago
  If it's a break of contract with the EUs playbook of economic fairness amongst its members and therefor can be prosecuted forever. This creates a system where even information from the national government charging taxes in its own jurisdiction can't be relied upon, and where literally billions of euros of tax can be retrospectively demanded indefinitely. That is a toxic environment for anyone running a business, even someone trying to do so honestly. If the EU wants to wade in after this much time and claim this much damage has been going on, it's going to strain credibility and the EU is going to deserve all the contempt that businesses will hold it in as a direct result. I write this, BTW, as someone who runs small businesses in the UK that very much are at a disadvantage compared to the arrangements available to large multinationals. I'm all in favour of having a tax system that is transparently fair, where the same rules apply to everyone. But I'm not in favour of officially saying one thing, letting businesses carry on accordingly for a very long time, and then retrospectively changing the rules. I think it's also worth mentioning that the EU's track record on tax issues and dealing with the large multinationals and their complex arrangements is awful. Just look at the hash they made of the VAT changes last year, which were supposedly going to have a beneficial effect by reducing multinational tax avoidance, but in fact did almost exactly the opposite, causing far more damage to smaller businesses than larger ones. Apple's tax arrangements may be ethically questionable, and the system that permits those arrangements has plenty of room for improvement. However, if you think this specific move isn't a politically motivated cash grab by an EU that is in trouble and has several key elections coming up, I heard there are some Nigerian princes who have some great investment opportunities to offer you.
  - pjc50 10y ago
    > I think it's also worth mentioning that the EU's track record on tax issues and dealing with the large multinationals and their complex arrangements is awful. Just look at the hash they made of the VAT changes last year, which were supposedly going to have a beneficial effect by reducing multinational tax avoidance, but in fact did almost exactly the opposite, causing far more damage to smaller businesses than larger ones. This is I think one of the few genuine substantial complaints against EU membership: the EU is very bad at dealing with small businesses, because they don't have time and money to get involved in the legislative process. Brussels is too far away.
    - Silhouette 10y ago
      Indeed. In the cast of the VAT mess, they literally didn't even realise that many thousands of very small ("micro") businesses existed. They effectively managed to legislate a lot of those businesses out of existence, because the compliance costs were more than the "extra Christmas present money" level of revenue the microbusinesses were generating. When the relevant officials finally noticed, literally a few days before the new rules came into effect, the initial response was basically "We've been working on this for years, why are people only objecting now?", as if someone selling knitting pattern PDFs from their kitchen table was going to know about EU-level discussions on international tax laws and contribute early. It was like a case study in being totally out of touch and introducing wildly disproportionate administrative burdens, and the officials involved didn't even realise they were the punchline.
- krona 10y ago
  >> a break of contract.. This isn't to do with a contract or treaty as much as how it's interpreted and how that interpretation has changed recently. What's changed in the past 18 months is how the EU Commission interprets the arms' length principle as it relates to international tax law, now using it's own guidelines instead of the international norm/consensus, i.e.: OECD Transfer Pricing Guidelines. 'Retroactive' is definitely the right word to use. >> Doesn't matter who gets the money Perhaps, but it matters who loses it. The US Treasury see it as their money, since the untaxed cash hoard being referred to is on the Apple Inc. balance sheet. The implications for the EU could be far reaching.
sangnoir 10y ago
> 1) The EU is essentially attacking a law made in 2003 in 2016. To do this retroactively for 13 years is far too long (imo). I'm seeing a lot of comments saying EU's action is "retroactive" or "retrospective" - it is not. The EU law was always there, and Apple and Ireland were both in contravention for all the 13 years. Apple was in compliance with Irish laws, while contravening EU law. If the IRS audits you and finds that you underpaying taxes for 13 years - you are going to pay all the taxes "retrospectively"! There isn't a 5-year statute of limitations on illegal EU subsidies (or IRS tax evasion).
- charlesdm 10y ago
  This depends on the country. For example, Belgium has a statute of limitations of 3 years on taxes, unless you're committing fraud, then it can be extended to 7. There would be no way to recover those taxes within the current Belgian framework without introducing new laws (retroactively). But retroactively introducing a tax law is generally prohibited by the constitution..
- marktheknife 10y ago
  You're wrong, Sangnoir. The IRS has a 3 year statute of limitations on most audits (beginning from date of filing return or date filing was due), 6 years if essentially the numbers on the tax return are way off, and unlimited if there is tax fraud. There was no fraud here.
  - sangnoir 10y ago
    mea culpa on IRS statute of limitations - I am not a tax lawyer/accountant - let alone an international tax accountant. In addition, the Apple/Ireland/EU issue is not directly a "tax" issue, but an illegal subsidy issue by way of taxes - and even that has a 10 year 'statute' from the time of enquiry by the EU. Since the EU made the enquiries in 2013, the period covered became 2003-2015. Whilst there was no fraud in this case, EU law was broken. The rest of my point remains though - this is not a new law, but a decades-old one.
flexie 10y ago
EU is telling Ireland to levy the general corporate tax in Ireland on Apple. Ireland has had that obligation all those years. EU legislation on state aid has always been this way. It's a usual thing to force a company (Apple) to pay back government subsidies (incl tax subsidies) to a member state (Ireland), which says it doesn't want the money. Member states granting illegal subsidies almost always say they believe the subsidies were legal or that no subsidies were granted.
pjc50 10y ago
> The EU is essentially attacking a law made in 2003 in 2016. To do this retroactively for 13 years is far too long (imo). See the actual EU press release: http://europa.eu/rapid/press-release_IP-16-2923_en.htm http://europa.eu/rapid/press-release_IP-16-2923_en.htm "The Commission can order recovery of illegal state aid for a ten-year period preceding the Commission's first request for information in 2013" The rules against state aid were always there in the various EU constitutional documents. Ten years is a long time, but it takes a long time to investigate complex issues and you don't want a system where it becomes worthwhile to stall the investigation and run out the clock. The real message is that companies should refrain from trying to do "deals" with individual member states; doing so is extremely divisive. One of the arguments going around at the time of Brexit (I have no idea whether it's true though!) was claims of EU grants being used to move car part production out of the UK to Eastern Europe. Edit: in fact, if you go through to http://ec.europa.eu/competition/state_aid/cases/253200/253200_1582634_87_2.pdf http://ec.europa.eu/competition/state_aid/cases/253200/25320... and read the description, it appears to date all the way back to 1991, where Apple sat down with the Irish revenue and simply decided how much tax they were going to pay. That's how transfer pricing works.

objclxt 10y ago

> If the EU wins the case, the money flows back to Ireland, in essence rewarding the country who was out of line to begin with. Not entirely - any monies returned can legally only be used to pay back Ireland's national debt. The UK, Germany, and France are the biggest holders of Ireland's debt, so effectively the money is going back to them, albeit with Ireland benefiting by reducing its debt marginally.

BenElgar 10y ago
I don't believe that's true. It's merely a recommendation. Source: http://www.irishtimes.com/business/economy/european-commission-says-ireland-not-obligated-to-use-apple-tax-cash-for-national-debt-1.2774229 http://www.irishtimes.com/business/economy/european-commissi...

humanbeinc 10y ago

1) No it's not. If it's a break of contract with the EUs playbook of economic fairness amongst its members and therefor can be prosecuted forever. 2) Doesn't matter who gets the money. It's forcing corporations to not use Ireland as a tax haven anymore (there are others like Luxembourg, etc., but it's a step in the right direction)

Silhouette 10y ago
If it's a break of contract with the EUs playbook of economic fairness amongst its members and therefor can be prosecuted forever. This creates a system where even information from the national government charging taxes in its own jurisdiction can't be relied upon, and where literally billions of euros of tax can be retrospectively demanded indefinitely. That is a toxic environment for anyone running a business, even someone trying to do so honestly. If the EU wants to wade in after this much time and claim this much damage has been going on, it's going to strain credibility and the EU is going to deserve all the contempt that businesses will hold it in as a direct result. I write this, BTW, as someone who runs small businesses in the UK that very much are at a disadvantage compared to the arrangements available to large multinationals. I'm all in favour of having a tax system that is transparently fair, where the same rules apply to everyone. But I'm not in favour of officially saying one thing, letting businesses carry on accordingly for a very long time, and then retrospectively changing the rules. I think it's also worth mentioning that the EU's track record on tax issues and dealing with the large multinationals and their complex arrangements is awful. Just look at the hash they made of the VAT changes last year, which were supposedly going to have a beneficial effect by reducing multinational tax avoidance, but in fact did almost exactly the opposite, causing far more damage to smaller businesses than larger ones. Apple's tax arrangements may be ethically questionable, and the system that permits those arrangements has plenty of room for improvement. However, if you think this specific move isn't a politically motivated cash grab by an EU that is in trouble and has several key elections coming up, I heard there are some Nigerian princes who have some great investment opportunities to offer you.
- pjc50 10y ago
  > I think it's also worth mentioning that the EU's track record on tax issues and dealing with the large multinationals and their complex arrangements is awful. Just look at the hash they made of the VAT changes last year, which were supposedly going to have a beneficial effect by reducing multinational tax avoidance, but in fact did almost exactly the opposite, causing far more damage to smaller businesses than larger ones. This is I think one of the few genuine substantial complaints against EU membership: the EU is very bad at dealing with small businesses, because they don't have time and money to get involved in the legislative process. Brussels is too far away.
  - Silhouette 10y ago
    Indeed. In the cast of the VAT mess, they literally didn't even realise that many thousands of very small ("micro") businesses existed. They effectively managed to legislate a lot of those businesses out of existence, because the compliance costs were more than the "extra Christmas present money" level of revenue the microbusinesses were generating. When the relevant officials finally noticed, literally a few days before the new rules came into effect, the initial response was basically "We've been working on this for years, why are people only objecting now?", as if someone selling knitting pattern PDFs from their kitchen table was going to know about EU-level discussions on international tax laws and contribute early. It was like a case study in being totally out of touch and introducing wildly disproportionate administrative burdens, and the officials involved didn't even realise they were the punchline.
krona 10y ago
>> a break of contract.. This isn't to do with a contract or treaty as much as how it's interpreted and how that interpretation has changed recently. What's changed in the past 18 months is how the EU Commission interprets the arms' length principle as it relates to international tax law, now using it's own guidelines instead of the international norm/consensus, i.e.: OECD Transfer Pricing Guidelines. 'Retroactive' is definitely the right word to use. >> Doesn't matter who gets the money Perhaps, but it matters who loses it. The US Treasury see it as their money, since the untaxed cash hoard being referred to is on the Apple Inc. balance sheet. The implications for the EU could be far reaching.

sangnoir 10y ago

> 1) The EU is essentially attacking a law made in 2003 in 2016. To do this retroactively for 13 years is far too long (imo). I'm seeing a lot of comments saying EU's action is "retroactive" or "retrospective" - it is not. The EU law was always there, and Apple and Ireland were both in contravention for all the 13 years. Apple was in compliance with Irish laws, while contravening EU law. If the IRS audits you and finds that you underpaying taxes for 13 years - you are going to pay all the taxes "retrospectively"! There isn't a 5-year statute of limitations on illegal EU subsidies (or IRS tax evasion).

charlesdm 10y ago
This depends on the country. For example, Belgium has a statute of limitations of 3 years on taxes, unless you're committing fraud, then it can be extended to 7. There would be no way to recover those taxes within the current Belgian framework without introducing new laws (retroactively). But retroactively introducing a tax law is generally prohibited by the constitution..
marktheknife 10y ago
You're wrong, Sangnoir. The IRS has a 3 year statute of limitations on most audits (beginning from date of filing return or date filing was due), 6 years if essentially the numbers on the tax return are way off, and unlimited if there is tax fraud. There was no fraud here.
- sangnoir 10y ago
  mea culpa on IRS statute of limitations - I am not a tax lawyer/accountant - let alone an international tax accountant. In addition, the Apple/Ireland/EU issue is not directly a "tax" issue, but an illegal subsidy issue by way of taxes - and even that has a 10 year 'statute' from the time of enquiry by the EU. Since the EU made the enquiries in 2013, the period covered became 2003-2015. Whilst there was no fraud in this case, EU law was broken. The rest of my point remains though - this is not a new law, but a decades-old one.

flexie 10y ago

EU is telling Ireland to levy the general corporate tax in Ireland on Apple. Ireland has had that obligation all those years. EU legislation on state aid has always been this way. It's a usual thing to force a company (Apple) to pay back government subsidies (incl tax subsidies) to a member state (Ireland), which says it doesn't want the money. Member states granting illegal subsidies almost always say they believe the subsidies were legal or that no subsidies were granted.

pjc50 10y ago

> The EU is essentially attacking a law made in 2003 in 2016. To do this retroactively for 13 years is far too long (imo). See the actual EU press release: http://europa.eu/rapid/press-release_IP-16-2923_en.htm http://europa.eu/rapid/press-release_IP-16-2923_en.htm "The Commission can order recovery of illegal state aid for a ten-year period preceding the Commission's first request for information in 2013" The rules against state aid were always there in the various EU constitutional documents. Ten years is a long time, but it takes a long time to investigate complex issues and you don't want a system where it becomes worthwhile to stall the investigation and run out the clock. The real message is that companies should refrain from trying to do "deals" with individual member states; doing so is extremely divisive. One of the arguments going around at the time of Brexit (I have no idea whether it's true though!) was claims of EU grants being used to move car part production out of the UK to Eastern Europe. Edit: in fact, if you go through to http://ec.europa.eu/competition/state_aid/cases/253200/253200_1582634_87_2.pdf http://ec.europa.eu/competition/state_aid/cases/253200/25320... and read the description, it appears to date all the way back to 1991, where Apple sat down with the Irish revenue and simply decided how much tax they were going to pay. That's how transfer pricing works.