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I agree with you about "EU is claiming exists might be legal according to Irish tax law, but that doesn't matter [to the EU]", and your source is helpful. I th

• astaunton 10y ago
  In standard terms, from discussing this with several tax accountants in Ireland, the issue lies in Ireland applied 13.5% tax on a certain percentage of the profits, those declared in Ireland at the time, but did not apply it to all the profits. Although the book-keeping was done in an Irish company the sales where not all in Ireland. At the time Ireland sought clarification from the EU on how the tax should be applied, and were told they could only tax the profits generated in Ireland. Now, after discovering there is a sum of money in off-shore accounts that had not had the tax deducted, they have told Ireland to retrospectively apply the 13% tax on all profits unless another EU country could claim the profits were generated there. So the original ruling was to use Ireland as a tax collector that the rest of Europe could then ask for the taxes they were due. It seems that the Irish gov are seeking to overturn the original ruling as, according to the original information sought at the time, they were not doing anything illegal. In hindsight the accounting irregularity, refereed to as the double Irish, meant that Apple could accumulate these profits. The main issue is that these monies have not been declared in any EU country, so now because of the EU's ruling Trump has decided it belongs to America because American companies should only declare profits in America :D
• akvadrako 10y ago
  Okay, I've looked into this a bit deeper since you've made me curious. I've read through the original ruling here: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52014XC1017(08) http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A5... It seems the main argument seems to be that the tax ruling from Ireland to Apple was not based on objective criteria but more of a negotiation like "we'll give you 1000 of jobs if you give us a discount". It seems reasonable to me to treat every ruling on that basis as "special treatment", even if they are commonly given. To quote: -------------------- The Commission notes, in the first place, that the taxable basis in the 1991 ruling was negotiated rather than substantiated by reference to comparable transactions. Moreover, according to the excerpt reproduced at recital (37), the authorities did not seem to have had the intention of establishing a profit allocation based on transfer pricing. Instead, according to that excerpt, Irish Revenue accepted the calculation of profit attributable to the branch of AOE on the basis of actual costs without this choice being reasoned in any way. The fact that the methods used to determine profit allocation to ASI and AOE result from a negotiation rather than a pricing methodology, reinforces the idea that the outcome of the agreed method is not arm’s length and that a prudent independent market operator would not have accepted the remuneration allocated to the branches of ASI and AOE in the same situation, which serve as a basis for calculating the tax liability. ------------------- They then go on to mention many irregularities with the ruling which seem to be reverse-engineered to get a desired tax basis, instead of based on the economic reality.
• fauigerzigerk 10y ago
  >The EU's claim, I think, is not that the deal is special in its entirety, but that Ireland's ruling on the exact fiddly details of how profits are allocated to different Apple subsidiaries is, uh, irregular. It's a pretty technical accounting point. Yes, the claim is that it is "irregular" in the sense that Apple got it and other companies may not get it. That's the special deal. Whether or not the EC is right is for the court to decide. But the fact that the ruling is on the question of a special deal means that it cannot at the same time be a ruling on the compliance of Irish law with EU law.
• nodamage 10y ago
  > I think if you read the actual claim they make, and then you go read the description of the Double Irish accounting trick on wikipedia Apple doesn't actually employ the double Irish as traditionally defined - the second half of the double Irish arrangement involves transferring profits to a company outside of Ireland (typically in a Caribbean tax haven). Apple doesn't do this. Their overseas profits remain in their Irish subsidiary, where they have a very low tax rate (which is what is being challenged by the EU). I think, ironically, that if Apple had fully implemented the double Irish arrangement (like many other multinational companies), the EU commission would not be able to go after Apple using this "favorable treatment" line of inquiry.