11 ms·

Apple will start paying $21B in back taxes to Ireland

140 points by jklp 8y ago

Tepix 8y ago
Finally! It's a shame that Ireland had to be forced to demand this money from Apple.
- Dawny33 8y ago
  Ireland wasn't demanding the money. They were actually opposing this ruling
  - kabes 8y ago
    That's what Tepix is saying. Ireland had to be forced (by the EU) to demand it.
- nkkollaw 8y ago
  Well, Apple went to Ireland just to get a tax break, and its desire to stay depended on future tax breaks. It's not surprising that Ireland would want to keep being able to give the tax break: very small taxes from Apple (and other companies) is better than no taxes from Apple at all.
  - dmurray 8y ago
    > very small taxes from Apple (and other companies) is better than no taxes from Apple at all. It's not just about the tax paid by Apple, but the tax paid by Apple employees. Income tax and VAT make up the majority of Ireland's tax receipts[0], and adding more jobs increases those. Ireland did not make 21B from additional VAT and income tax receipts thanks to Apple - I estimate more like 2B - but she probably made an amount commensurate with the amount of value added by Apple employees in Ireland. The excess comes from Apple's ability to declare a large part of its worldwide corporate income in Ireland, which somehow is not what is under scrutiny here. [0]https://amp.independent.ie/business/irish/tax-receipts-on-target-as-the-state-rakes-in-47bn-36378271.html https://amp.independent.ie/business/irish/tax-receipts-on-ta...
PunchTornado 8y ago
Sadly, the government has to accept it. Damn EU! Destroying our country.
- arthursilva 8y ago
  This is an insane comment, are you even aware of what's happening?
- gaius 8y ago
  Ireland is assisting Apple to avoid taxes that should rightly be paid in EU countries including presently the UK, while benefiting greatly from EU spending. What did you think was going to happen?
- NicoJuicy 8y ago
  The EU bailed Ireland out a couple of years ago. Perhaps you should realize that the "tax break" and their "double sandwich" wouldn't be possible WITHOUT the EU.
  - ocfnash 8y ago
    Like most Irish people, I am a huge fan of the EU, and of the many benefits we enjoy thanks to our fellow European citizens, via the EU. Nevertheless I feel compelled to nitpick at the statement that the EU bailed Ireland out. I believe the most important components of the so-called bailout instrumented by the IMF, ECB, and EU were that: A. Ireland was forced to turn about 65bn euro of private (banking) debt into public debt [for scale: our national debt was 36bn a couple of years before] B. The Irish government was allowed to run an _enormous_ budget deficit for many years I don't know what would have been best for Ireland given the situation, but I'm not delighted about A and B. Even if the terms of the bailout were best for Ireland, all of money received went onto our national debt, which is now well over 200bn euro, and which we must pay back with interest.
- lawlessone 8y ago
  The EU is pulling our country out of the dark ages kicking and screaming.. in more ways than one.
Kudos 8y ago
That's Australian dollars, it's €13B.
- k_ 8y ago
  So that's why there is such a difference with the link about the escrow account [1]. Maybe the title should be edited on HN to reflect that, since the australian context is not obvious (not hidden, either, but I missed it at first) [1] http://www.businessinsider.com/r-ireland-expects-apple-back-tax-in-escrow-account-in-first-quarter-2018-minister-2017-12?IR=T http://www.businessinsider.com/r-ireland-expects-apple-back-...
macco 8y ago
When will countries finally understand that it's better to co-operate them too compete against another? Multinational companies are playing them against each other.
- Narkov 8y ago
  You are right but it will never happen. It only takes one country to break ranks and the game is back on again.
  - toyg 8y ago
    I wouldn't be so pessimistic. This was happening in XVIII and XIX century Europe too, which was much more divided politically. Thanks to the industrial revolution, businesses went from town-size to country-size. In reaction, nations coagulated around larger cores. Similarly, when businesses played national region versus national region, workers' right movements were forced to scale up to respond. In many ways, the emergence of the EU was forced by the rise of supranationally-sized industrial giants emerging from US and URSS. Now that it's clear that "supranational champions" really have no fundamental loyalty, there is a very high chance that supranational institutions will become more and more powerful. The challenge is to make those institutions answer to everyone rather than just to the elites.
  - IAmEveryone 8y ago
    Seems like this very article is about this practice ending?
- danmaz74 8y ago
  The thing is, if you're a small enough country that can tax - at a lower rate - revenues/profits generated in other bigger countries, then for you it's better to be able to compete. As long as the bigger countries allow that, that is.
- soneil 8y ago
  A quote I noticed in fortune(1) today: "The great nations have always acted like gangsters, and the small nations like prostitutes." Seems particularly apt in this context.
naskwo 8y ago
It's weird that the EU has a monetary union, but so much difference in corporate income tax rates. Great that IE is 12%, but this "competition" is BS in the sense that they needed the higher-tax countries to bail them out just a few years ago: https://en.wikipedia.org/wiki/Post-2008_Irish_banking_crisis https://en.wikipedia.org/wiki/Post-2008_Irish_banking_crisis It's a leak in the EU system, and it needs to be plugged. Just imagine what a unified income tax rate in the EU would do. (Post-Brexit, although if I were a gambling man, I'd wager that the Brexit will never materialize; A Brexit would sort of be like throwing out your existing post-ww2 source code instead of refactoring. Recipe for disaster). THEN countries would really need to compete on quality of life and infrastructure to attract (US) corporations to establish show. Amsterdam is happy to welcome all the post-Brexit (see comment above) banks and EU-related orgs, as is Frankfurt.
- jmickey 8y ago
  Agreed, this is something we at http://volteuropa.org http://volteuropa.org are working towards! Unified tax rates would greatly reduce the burden of setting up and running a business in the EU.
  - icebraining 8y ago
    It's amazing how little that site actually says. It's just populist talk with a smiley face.
  - rorykoehler 8y ago
    Unified tax rates in the eurozone will just make smaller poorer countries uncompetitive funnelling all the money to manufacturing powerhouses with high purchasing power like Germany.
- rusk 8y ago
  You are correct in saying this is a leak in the EU system. You could say it relates to the fact that what you have is a centralised money system but with a federated reserve. The EU banking system as a whole was very weak. Optimistically configured you might say. When the economy plunged it sent ripples right across the European banking sector which essentially were contained in Ireland, which as a small economy could take the hit without affecting the rest of the continent. If you think about it, there's no way the sums that were lost in the banking crisis could ever have been vested in a small country like Ireland. There were creative financial strategies going on everywhere and Ireland was only a single node in all of this. When you look closer at the whole thing, a lot of the money lost was due to political decisions in the midst of the crisis, rather than purely financial mismanagement in the years before. Here's a few. Ireland being forced to take on payment of "subordinate" bond holders [0]. The bank guarantee [1]. The failure to nationalise (in time) what was effectively a financial time bomb [2] Ireland was a patsy for the failures of the European system. As a weak link in the chain Ireland naturally took the fall, and many were outraged for a time, but now in light of Brexit everyone's quite happy to be such a significant debtor. [0] http://www.thejournal.ie/troika-warned-a-bomb-will-go-off-in-dublin-unless-anglo-bondholders-repaid-334621-Jan2012/ http://www.thejournal.ie/troika-warned-a-bomb-will-go-off-in... [1] https://www.irishtimes.com/business/financial-services/night-of-the-bank-guarantee-big-questions-remain-unanswered-1.2212841 https://www.irishtimes.com/business/financial-services/night... [2] https://www.irishtimes.com/news/government-to-nationalise-anglo-irish-bank-1.834324 https://www.irishtimes.com/news/government-to-nationalise-an...
FBISurveillance 8y ago
I'm glad this is happening, hope they'll close this Double Irish Dutch Sandwich loophole for good.
- Hamuko 8y ago
  I can't wait for the next crazy tax dodge scheme name.
- briandear 8y ago
  I don’t. Not unless European countries plan to lower taxes. High tax rates are what causes these accountancy gymnastics. If the EU just charged a flat 10% tax — and actually enforced it, tax revenues would rise and these loopholes would be unneeded. Foreign companies would actually relocate to Europe by choice and not by necessity. Unemployment would also drop as a result. Business would boom.
  - FBISurveillance 8y ago
    This is a different problem though. Sure thing, EU should work on improving the imperfect system; for what it's worth I personally think the EU state is little too socialist and too safe, if you will. But this isolated issue with this particular tax dodging scheme should be solved separately, as should "lowering tax rate", "reducing unemployment" et al. Enforcing law is different job than making law.
  - stephen_g 8y ago
    According to certain theoretical frameworks... Empirically though there generally isn't any causal relationship demonstrated between corporate tax rates and wages, economic growth, or unemployment in most statistical data. This is a really big debate in Australia at the moment, a lobby group made up of large corporates (the Business Council of Australia) is campaigning heavily for a tax cut given the recent Trump cuts. So there's been a lot of examination of this data and the best they have is intuitive arguments ("of course if there's more profits you'll have more investment and employment") but they admitted in a Senate enquiry just yesterday that they didn't actually have any demonstrable statistical evidence that tax cuts have caused employment growth, wage growth or increased investment in any developed economy.
deleted 8y ago
[deleted]
chx 8y ago
> Apple was hit by the European Commission with a $21 billion bill for back taxes in 2016. > It’s starting to pay the funds You know, I was fined for not paying my installments (not my taxes! just my installments) in 2017 and these guys didn't pay their back taxes for two bloody years and were not charged hefty penalties and interest for it. Really, blood boiling unfair.
- grecy 8y ago
  Absolutely, I agree 100% One year I made a mistake on my taxes and my refund was $1000 more than it should have been. Six months later not only was I fined for the mistake and forced to pay back the $1000, I had to pay interest on that $1000. (Canada) This year when the government owed me $6000 in overpaid taxes, why didn't they pay me interest on my money they were holding...?
  - justherefortart 8y ago
    Because your taxes are your duty. In the US, if you don't file for a year and are owed, after the filing period they do pay interest. But not for the initial filing year. In fact, if you over pay too much, they (the IRS) can penalize you for that as well.
    - gamblor956 8y ago
      Their is no penalty for overpaying your taxes unless you mean the implicit loss of the time value of the money overpaid. Anyone who's been "penalized" for overpaying their taxes was actually underpaying their taxes prior to their overpayment. People don't realize that taxes are generally due over the course of the year (usually quarterly), not all at once on April 15/16/17. The April deadline is just the due date for the final payment of your prior year's tax liability. If you were underpaying during the year, you could be penalized for that even if you overpaid in April the following year. This is why trying to game your withholding on your wages (i.e., minimal or underwithholding) is such a bad idea. Any gain (i.e., investing in stocks) is usually more than offset by the penalties and interest you pay if you end up being wrong about how much in taxes you owed. The stock market would have to have a very bullish year to see an upside, usually better than 10% growth--and the target just goes up as interest rates go up.
hungerstrike 8y ago
Duplicate of https://news.ycombinator.com/item?id=16913050 https://news.ycombinator.com/item?id=16913050
corey_moncure 8y ago
That's roughly $5000 per Irish citizen. A good day for those chaps! Presumably they will be paying interest on all this borrowed money, yes? As well as late fees for non-payment?
- stolson 8y ago
  If only.
Isamu 8y ago
NOTE: Headline is misleading. Actually what they are starting to do is put the money into escrow while the case moves slowly through the courts. Ireland is not yet receiving money for back taxes. Ireland's position is still that the taxes are not owed and that the government made no improper deals. It will take some years before the taxes are actually paid to Ireland or Apple gets the money back from escrow.
acchow 8y ago
AAPL up 1.1%. Seems the markets already believed Apple would lose this one.
sabujp 8y ago
how about you pay back taxes to the US
blklivesmatter 8y ago
I cannot be more happy. Why is that small private companies are always paying big company cheats ? Amazon, facebook and Google should be fined also

140 points by jklp 8y ago

Tepix 8y ago

Finally! It's a shame that Ireland had to be forced to demand this money from Apple.

Dawny33 8y ago
Ireland wasn't demanding the money. They were actually opposing this ruling
- kabes 8y ago
  That's what Tepix is saying. Ireland had to be forced (by the EU) to demand it.
nkkollaw 8y ago
Well, Apple went to Ireland just to get a tax break, and its desire to stay depended on future tax breaks. It's not surprising that Ireland would want to keep being able to give the tax break: very small taxes from Apple (and other companies) is better than no taxes from Apple at all.
- dmurray 8y ago
  > very small taxes from Apple (and other companies) is better than no taxes from Apple at all. It's not just about the tax paid by Apple, but the tax paid by Apple employees. Income tax and VAT make up the majority of Ireland's tax receipts[0], and adding more jobs increases those. Ireland did not make 21B from additional VAT and income tax receipts thanks to Apple - I estimate more like 2B - but she probably made an amount commensurate with the amount of value added by Apple employees in Ireland. The excess comes from Apple's ability to declare a large part of its worldwide corporate income in Ireland, which somehow is not what is under scrutiny here. [0]https://amp.independent.ie/business/irish/tax-receipts-on-target-as-the-state-rakes-in-47bn-36378271.html https://amp.independent.ie/business/irish/tax-receipts-on-ta...

PunchTornado 8y ago

Sadly, the government has to accept it. Damn EU! Destroying our country.

arthursilva 8y ago
This is an insane comment, are you even aware of what's happening?
gaius 8y ago
Ireland is assisting Apple to avoid taxes that should rightly be paid in EU countries including presently the UK, while benefiting greatly from EU spending. What did you think was going to happen?
NicoJuicy 8y ago
The EU bailed Ireland out a couple of years ago. Perhaps you should realize that the "tax break" and their "double sandwich" wouldn't be possible WITHOUT the EU.
- ocfnash 8y ago
  Like most Irish people, I am a huge fan of the EU, and of the many benefits we enjoy thanks to our fellow European citizens, via the EU. Nevertheless I feel compelled to nitpick at the statement that the EU bailed Ireland out. I believe the most important components of the so-called bailout instrumented by the IMF, ECB, and EU were that: A. Ireland was forced to turn about 65bn euro of private (banking) debt into public debt [for scale: our national debt was 36bn a couple of years before] B. The Irish government was allowed to run an _enormous_ budget deficit for many years I don't know what would have been best for Ireland given the situation, but I'm not delighted about A and B. Even if the terms of the bailout were best for Ireland, all of money received went onto our national debt, which is now well over 200bn euro, and which we must pay back with interest.
lawlessone 8y ago
The EU is pulling our country out of the dark ages kicking and screaming.. in more ways than one.

Kudos 8y ago

That's Australian dollars, it's €13B.

k_ 8y ago
So that's why there is such a difference with the link about the escrow account [1]. Maybe the title should be edited on HN to reflect that, since the australian context is not obvious (not hidden, either, but I missed it at first) [1] http://www.businessinsider.com/r-ireland-expects-apple-back-tax-in-escrow-account-in-first-quarter-2018-minister-2017-12?IR=T http://www.businessinsider.com/r-ireland-expects-apple-back-...

macco 8y ago

When will countries finally understand that it's better to co-operate them too compete against another? Multinational companies are playing them against each other.

Narkov 8y ago
You are right but it will never happen. It only takes one country to break ranks and the game is back on again.
- toyg 8y ago
  I wouldn't be so pessimistic. This was happening in XVIII and XIX century Europe too, which was much more divided politically. Thanks to the industrial revolution, businesses went from town-size to country-size. In reaction, nations coagulated around larger cores. Similarly, when businesses played national region versus national region, workers' right movements were forced to scale up to respond. In many ways, the emergence of the EU was forced by the rise of supranationally-sized industrial giants emerging from US and URSS. Now that it's clear that "supranational champions" really have no fundamental loyalty, there is a very high chance that supranational institutions will become more and more powerful. The challenge is to make those institutions answer to everyone rather than just to the elites.
- IAmEveryone 8y ago
  Seems like this very article is about this practice ending?
danmaz74 8y ago
The thing is, if you're a small enough country that can tax - at a lower rate - revenues/profits generated in other bigger countries, then for you it's better to be able to compete. As long as the bigger countries allow that, that is.
soneil 8y ago
A quote I noticed in fortune(1) today: "The great nations have always acted like gangsters, and the small nations like prostitutes." Seems particularly apt in this context.

naskwo 8y ago

It's weird that the EU has a monetary union, but so much difference in corporate income tax rates. Great that IE is 12%, but this "competition" is BS in the sense that they needed the higher-tax countries to bail them out just a few years ago: https://en.wikipedia.org/wiki/Post-2008_Irish_banking_crisis https://en.wikipedia.org/wiki/Post-2008_Irish_banking_crisis It's a leak in the EU system, and it needs to be plugged. Just imagine what a unified income tax rate in the EU would do. (Post-Brexit, although if I were a gambling man, I'd wager that the Brexit will never materialize; A Brexit would sort of be like throwing out your existing post-ww2 source code instead of refactoring. Recipe for disaster). THEN countries would really need to compete on quality of life and infrastructure to attract (US) corporations to establish show. Amsterdam is happy to welcome all the post-Brexit (see comment above) banks and EU-related orgs, as is Frankfurt.

jmickey 8y ago
Agreed, this is something we at http://volteuropa.org http://volteuropa.org are working towards! Unified tax rates would greatly reduce the burden of setting up and running a business in the EU.
- icebraining 8y ago
  It's amazing how little that site actually says. It's just populist talk with a smiley face.
- rorykoehler 8y ago
  Unified tax rates in the eurozone will just make smaller poorer countries uncompetitive funnelling all the money to manufacturing powerhouses with high purchasing power like Germany.
rusk 8y ago
You are correct in saying this is a leak in the EU system. You could say it relates to the fact that what you have is a centralised money system but with a federated reserve. The EU banking system as a whole was very weak. Optimistically configured you might say. When the economy plunged it sent ripples right across the European banking sector which essentially were contained in Ireland, which as a small economy could take the hit without affecting the rest of the continent. If you think about it, there's no way the sums that were lost in the banking crisis could ever have been vested in a small country like Ireland. There were creative financial strategies going on everywhere and Ireland was only a single node in all of this. When you look closer at the whole thing, a lot of the money lost was due to political decisions in the midst of the crisis, rather than purely financial mismanagement in the years before. Here's a few. Ireland being forced to take on payment of "subordinate" bond holders [0]. The bank guarantee [1]. The failure to nationalise (in time) what was effectively a financial time bomb [2] Ireland was a patsy for the failures of the European system. As a weak link in the chain Ireland naturally took the fall, and many were outraged for a time, but now in light of Brexit everyone's quite happy to be such a significant debtor. [0] http://www.thejournal.ie/troika-warned-a-bomb-will-go-off-in-dublin-unless-anglo-bondholders-repaid-334621-Jan2012/ http://www.thejournal.ie/troika-warned-a-bomb-will-go-off-in... [1] https://www.irishtimes.com/business/financial-services/night-of-the-bank-guarantee-big-questions-remain-unanswered-1.2212841 https://www.irishtimes.com/business/financial-services/night... [2] https://www.irishtimes.com/news/government-to-nationalise-anglo-irish-bank-1.834324 https://www.irishtimes.com/news/government-to-nationalise-an...

FBISurveillance 8y ago

I'm glad this is happening, hope they'll close this Double Irish Dutch Sandwich loophole for good.

Hamuko 8y ago
I can't wait for the next crazy tax dodge scheme name.
briandear 8y ago
I don’t. Not unless European countries plan to lower taxes. High tax rates are what causes these accountancy gymnastics. If the EU just charged a flat 10% tax — and actually enforced it, tax revenues would rise and these loopholes would be unneeded. Foreign companies would actually relocate to Europe by choice and not by necessity. Unemployment would also drop as a result. Business would boom.
- FBISurveillance 8y ago
  This is a different problem though. Sure thing, EU should work on improving the imperfect system; for what it's worth I personally think the EU state is little too socialist and too safe, if you will. But this isolated issue with this particular tax dodging scheme should be solved separately, as should "lowering tax rate", "reducing unemployment" et al. Enforcing law is different job than making law.
- stephen_g 8y ago
  According to certain theoretical frameworks... Empirically though there generally isn't any causal relationship demonstrated between corporate tax rates and wages, economic growth, or unemployment in most statistical data. This is a really big debate in Australia at the moment, a lobby group made up of large corporates (the Business Council of Australia) is campaigning heavily for a tax cut given the recent Trump cuts. So there's been a lot of examination of this data and the best they have is intuitive arguments ("of course if there's more profits you'll have more investment and employment") but they admitted in a Senate enquiry just yesterday that they didn't actually have any demonstrable statistical evidence that tax cuts have caused employment growth, wage growth or increased investment in any developed economy.

deleted 8y ago

[deleted]

chx 8y ago

> Apple was hit by the European Commission with a $21 billion bill for back taxes in 2016. > It’s starting to pay the funds You know, I was fined for not paying my installments (not my taxes! just my installments) in 2017 and these guys didn't pay their back taxes for two bloody years and were not charged hefty penalties and interest for it. Really, blood boiling unfair.

grecy 8y ago
Absolutely, I agree 100% One year I made a mistake on my taxes and my refund was $1000 more than it should have been. Six months later not only was I fined for the mistake and forced to pay back the $1000, I had to pay interest on that $1000. (Canada) This year when the government owed me $6000 in overpaid taxes, why didn't they pay me interest on my money they were holding...?
- justherefortart 8y ago
  Because your taxes are your duty. In the US, if you don't file for a year and are owed, after the filing period they do pay interest. But not for the initial filing year. In fact, if you over pay too much, they (the IRS) can penalize you for that as well.
  - gamblor956 8y ago
    Their is no penalty for overpaying your taxes unless you mean the implicit loss of the time value of the money overpaid. Anyone who's been "penalized" for overpaying their taxes was actually underpaying their taxes prior to their overpayment. People don't realize that taxes are generally due over the course of the year (usually quarterly), not all at once on April 15/16/17. The April deadline is just the due date for the final payment of your prior year's tax liability. If you were underpaying during the year, you could be penalized for that even if you overpaid in April the following year. This is why trying to game your withholding on your wages (i.e., minimal or underwithholding) is such a bad idea. Any gain (i.e., investing in stocks) is usually more than offset by the penalties and interest you pay if you end up being wrong about how much in taxes you owed. The stock market would have to have a very bullish year to see an upside, usually better than 10% growth--and the target just goes up as interest rates go up.

hungerstrike 8y ago

Duplicate of https://news.ycombinator.com/item?id=16913050 https://news.ycombinator.com/item?id=16913050

corey_moncure 8y ago

That's roughly $5000 per Irish citizen. A good day for those chaps! Presumably they will be paying interest on all this borrowed money, yes? As well as late fees for non-payment?

stolson 8y ago
If only.

Isamu 8y ago

NOTE: Headline is misleading. Actually what they are starting to do is put the money into escrow while the case moves slowly through the courts. Ireland is not yet receiving money for back taxes. Ireland's position is still that the taxes are not owed and that the government made no improper deals. It will take some years before the taxes are actually paid to Ireland or Apple gets the money back from escrow.

acchow 8y ago

AAPL up 1.1%. Seems the markets already believed Apple would lose this one.

sabujp 8y ago

how about you pay back taxes to the US

blklivesmatter 8y ago

I cannot be more happy. Why is that small private companies are always paying big company cheats ? Amazon, facebook and Google should be fined also