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Cases like that often appear when EU country does something that's consider a subsidy. A criteria is selective enforcement/favoritising of one company. If Irela

by Erwin 10y ago

Cases like that often appear when EU country does something that's consider a subsidy. A criteria is selective enforcement/favoritising of one company. If Ireland said: come to Ireland and pay 0.005% corporate tax, that would be fine by EU competition law. Last year the big Danish energy company DONG (recently privatized and entered the stock market) was investigated but found not in violation. Here's an exciting article about it: http://europa.eu/rapid/press-release_IP-16-1885_en.htm http://europa.eu/rapid/press-release_IP-16-1885_en.htm These cases take years to investigate. So no, Vestager is not selectively helping Denmark; you are looking at the wrong country for corruption.

charlesdm 10y ago
Don't get me wrong, I think it's good to use the state aid mechanic as a way to combat unfair competition. But I think retroactively applying it for 15 years is wrong, and displays incompetence. These breaks have existed for years, and it's not like the EU didn't know about them. Most countries don't even have national laws that allow recovering of taxes after 5-7 years. I recently read in the newspapers she's also investigating Belgian harbours, because for some reason, they're exempt from paying corporate tax. HOWEVER, if she'd rule against it, she would be unable to force the Belgian government to recoup that money, because that tax break existed even from before the EU was founded..
- Erwin 10y ago
  I can only say that tax cases that go just to the lowest court instance in Denmark can take years to complete. Here's the most recent tax related cases I could find: http://www.skat.dk/SKAT.aspx?oId=2232974&vId=0 http://www.skat.dk/SKAT.aspx?oId=2232974&vId=0 This person said they were not taxable for 2008 and 2009. The tax authorities disagree. A complex case with the person moving abroad is described. The amount of money that would be taxable is less than $200,000. In 2014, a tax court ruled one thing. Now in 2016 the first city court looked at the case. And that's just for one person, with relatively simple finances. I can imagine considering Apple and the even more complex EU law could take huge amounts of time to process. The article said 3+ years was used on just investigating the case. Maybe if they had an extra 500 lawyers and accountants they could do it quicker. Or better legal powers to investigate this sort of tax stuff between the countries. But from what I've heard, I imagine the cross-border investigations are sending letters to the local authorities and waiting months before you get any concrete information. These guys are nothing like the federal law enforcement of US. Take the tobacco lawsuits in US -- wasn't it known for 40+ years that tobacco was extremely harmful? Should the companies be allowed to continue given they haven't been sued by the government or stopped in some way for that amount of time?
  - charlesdm 10y ago
    You're absolutely right. But the EU has not been given direct power to set tax law. I'm not against more unification of the whole EU tax system, but currently, within the current framework, they are overstepping their bounds. I'm looking forward to the trial, and I'm curious what the ECJ will decide in this case. Also, regardless of the company, don't you deserve a fair trial if the law is applied correctly? For if we disregard this, we might as well disregard other situations, which creates a dangerous precedent. Legislators shouldn't be putting the burden on companies, because they badly designed some law (or it had unintended consequences). I've personally almost gone to court on a tax case, where the tax authority was pulling ridiculous arguments out of thin air with no merit whatsoever. The guy handling my case was extremely unreasonable, and it took intervention from some high up civil servant (who was more "up to date" on specifics of that law) to make him change his mind. It helped that I had one of the best local tax law firms represent me. These are often test cases to see what judges will allow, and to see if the precedent will stick. No point going to court if you don't have a good case and setting a bad precedent, since I said I would have no problem publishing the judgements for the entire tax community to see if I won. A full tax case can easily take 10-15 years.
    - Silhouette 10y ago
      A full tax case can easily take 10-15 years. Which is utterly absurd by any reasonable standard. Governments claiming the money may be faceless machines grinding away, but on the other side it's either a private individual or a business dealing with it. If it's a private individual, or a small business where the lives of those running it are very directly connected to the business's performance, then any tax investigation forces them to live with a sword hanging over them throughout. That is going to cause considerable distress and potentially to undermine any long term financial planning they want to do, among other harm. Expecting someone to put up with that situation for a few months is bad enough. Expecting someone to put up with it for a decade or more is wildly disproportionate, even in the case of a significant underpayment if it was due to an honest misunderstanding rather than clear and deliberate tax evasion. Even if we're talking about a large business whose staff might not suffer personally as a result of the case, it's still going to waste staggering amounts of time and resources to participate in an investigation over such a long time. It's going to damage long term financial planning, it's going to be unpleasant for the staff, particularly anyone potentially responsible for any mistakes, and it's going to cost the shareholders a small fortune, and again all of that remains true even if the final conclusion is that no-one did anything wrong or little real harm was done. I just don't see any justification for these endless legal proceedings or going back far into history. IMHO there should be a statute of limitations of a few years in place after which what's past is past, there should be a strict limit on how long any investigation can last before either formal legal proceedings are held or the matter is dropped permanently, and ideally both of those time limits should be in some way proportionate to the scale of the alleged shortfall.

by Erwin 10y ago

charlesdm 10y ago

Don't get me wrong, I think it's good to use the state aid mechanic as a way to combat unfair competition. But I think retroactively applying it for 15 years is wrong, and displays incompetence. These breaks have existed for years, and it's not like the EU didn't know about them. Most countries don't even have national laws that allow recovering of taxes after 5-7 years. I recently read in the newspapers she's also investigating Belgian harbours, because for some reason, they're exempt from paying corporate tax. HOWEVER, if she'd rule against it, she would be unable to force the Belgian government to recoup that money, because that tax break existed even from before the EU was founded..

Erwin 10y ago
I can only say that tax cases that go just to the lowest court instance in Denmark can take years to complete. Here's the most recent tax related cases I could find: http://www.skat.dk/SKAT.aspx?oId=2232974&vId=0 http://www.skat.dk/SKAT.aspx?oId=2232974&vId=0 This person said they were not taxable for 2008 and 2009. The tax authorities disagree. A complex case with the person moving abroad is described. The amount of money that would be taxable is less than $200,000. In 2014, a tax court ruled one thing. Now in 2016 the first city court looked at the case. And that's just for one person, with relatively simple finances. I can imagine considering Apple and the even more complex EU law could take huge amounts of time to process. The article said 3+ years was used on just investigating the case. Maybe if they had an extra 500 lawyers and accountants they could do it quicker. Or better legal powers to investigate this sort of tax stuff between the countries. But from what I've heard, I imagine the cross-border investigations are sending letters to the local authorities and waiting months before you get any concrete information. These guys are nothing like the federal law enforcement of US. Take the tobacco lawsuits in US -- wasn't it known for 40+ years that tobacco was extremely harmful? Should the companies be allowed to continue given they haven't been sued by the government or stopped in some way for that amount of time?
- charlesdm 10y ago
  You're absolutely right. But the EU has not been given direct power to set tax law. I'm not against more unification of the whole EU tax system, but currently, within the current framework, they are overstepping their bounds. I'm looking forward to the trial, and I'm curious what the ECJ will decide in this case. Also, regardless of the company, don't you deserve a fair trial if the law is applied correctly? For if we disregard this, we might as well disregard other situations, which creates a dangerous precedent. Legislators shouldn't be putting the burden on companies, because they badly designed some law (or it had unintended consequences). I've personally almost gone to court on a tax case, where the tax authority was pulling ridiculous arguments out of thin air with no merit whatsoever. The guy handling my case was extremely unreasonable, and it took intervention from some high up civil servant (who was more "up to date" on specifics of that law) to make him change his mind. It helped that I had one of the best local tax law firms represent me. These are often test cases to see what judges will allow, and to see if the precedent will stick. No point going to court if you don't have a good case and setting a bad precedent, since I said I would have no problem publishing the judgements for the entire tax community to see if I won. A full tax case can easily take 10-15 years.
  - Silhouette 10y ago
    A full tax case can easily take 10-15 years. Which is utterly absurd by any reasonable standard. Governments claiming the money may be faceless machines grinding away, but on the other side it's either a private individual or a business dealing with it. If it's a private individual, or a small business where the lives of those running it are very directly connected to the business's performance, then any tax investigation forces them to live with a sword hanging over them throughout. That is going to cause considerable distress and potentially to undermine any long term financial planning they want to do, among other harm. Expecting someone to put up with that situation for a few months is bad enough. Expecting someone to put up with it for a decade or more is wildly disproportionate, even in the case of a significant underpayment if it was due to an honest misunderstanding rather than clear and deliberate tax evasion. Even if we're talking about a large business whose staff might not suffer personally as a result of the case, it's still going to waste staggering amounts of time and resources to participate in an investigation over such a long time. It's going to damage long term financial planning, it's going to be unpleasant for the staff, particularly anyone potentially responsible for any mistakes, and it's going to cost the shareholders a small fortune, and again all of that remains true even if the final conclusion is that no-one did anything wrong or little real harm was done. I just don't see any justification for these endless legal proceedings or going back far into history. IMHO there should be a statute of limitations of a few years in place after which what's past is past, there should be a strict limit on how long any investigation can last before either formal legal proceedings are held or the matter is dropped permanently, and ideally both of those time limits should be in some way proportionate to the scale of the alleged shortfall.