4 ms·

> What's the cause of all the flip flopping between Apple having to pay the bill or not? I think the main problem that this area of law is fundamentally uncerta

by izacus 3y ago

> What's the cause of all the flip flopping between Apple having to pay the bill or not? I think the main problem that this area of law is fundamentally uncertain and hard to apply. Legal mistakes get made, and judgements get appealed until people figure out what the law actually says. Or you know, Apple is trying really hard to not pay the tax they should and are stalling the process by throwing lawyers at it, because they want to continue their shell company scheme of reselling IP rights to avoid taxes in locales where they sell their hardware and make profit. Is this the first time you're seeing a megacorp try their hardest not to pay their due?

todd-davies 3y ago
For sure they are throwing lawyers at it. It's 13bn after all. But the underlying reason for the appeal is the same; the law is not yet clear as to what should happen.
- izacus 3y ago
  Where do you see the lack of clarity? A wish to avoid paying is not lack of clarity.
  - s1artibartfast 3y ago
    The case is between the Irish government and the EU. Ireland made a a tax deal with Apple. Ireland also made a no corporate subsidy deal with the EU. EU wants apple taxed. Ireland says a tax break is not a subsidy, and a subsidy would be if they gave Apple grants, funds, or special loans
    - AnthonyMouse 3y ago
      > Ireland also made a no corporate subsidy deal with the EU. That seems odd. For example, if the government provides a national healthcare system, this is effectively a subsidy to employers who can then avoid providing a health plan their employees might otherwise demand or otherwise have to pay them more to compensate for their need to pay for their own healthcare. How is this being distinguished from any other form of subsidy? Isn't subsidizing things what governments do with tax money?
      - padjo 3y ago
        Bans on state subsidies are a core principle that enables the EU single market. Otherwise the market could easily be distorted by state aid. However it’s far from simple in practice and is something the member states have been arguing about forever. The rest of the eu has never been happy with irelands tax policy but since taxation is a national competency they can’t do anything about it directly. They can however frame it as state aid and try to attack it that way. Edit to add, information on how state aid works in eu context: https://enterprise.gov.ie/en/what-we-do/eu-internal-market/eu-state-aid-rules/ https://enterprise.gov.ie/en/what-we-do/eu-internal-market/e...
        AnthonyMouse 3y ago
        > Bans on state subsidies are a core principle that enables the EU single market. Otherwise the market could easily be distorted by state aid. It seems impossible to avoid this. If one state spends money on something that benefits businesses and another spends it on something else, those businesses will prefer the first one. But this isn't actually that much of a problem because each state has finite resources and its people get to decide how to use them. If one wants to have a UBI (which might increase entrepreneurship and the number of small businesses engaged in taxable activity) and another wants to lower unemployment by attracting large employers with subsidies and a third just wants to have lower taxes, what's the problem? That one might actually work better than another?
  - NoboruWataya 3y ago
    Without getting into the nitty gritty of it, it seems pretty obvious that there is a lack of clarity given that the European Commission came to one conclusion, the General Court concluded that the European Commission was incorrect and now an advocate general for the European Court of Justice has concluded that the General Court was incorrect. These are all smart people who have spent a lot of time and effort studying the law in this area. There are a lot of extremely reductionist takes on the case in the media but the actual legal principles in dispute, and their application to the facts, are quite complex.
    - izacus 3y ago
      You keep mixing up "muddying the waters to avoid paying tax" and "lack of clarity" The "lack" you speak of is generated by a megacorporation to avoid paying their part - and you keep attributing it to the wrong party.
      - TrapLord_Rhodo 3y ago
        It's not apple V. EU. It's Ireland Vs. EU. The real crux of the argument is; Does Ireland have the authority to grant Apple it's deal.
      - NoboruWataya 3y ago
        It is the EU institutions who are disagreeing with each other, Apple have nothing to do with it. The General Court of the EU isn't muddying the waters to help Apple avoid paying tax. This is the General Court's judgment by the way: https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:62016TJ0778 https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:62...
      - AnthonyMouse 3y ago
        Corporations will always attempt to lower their costs. It's like blaming the rain for being wet. It isn't inherently necessary to have a tax system so convoluted that these games are even possible. If you tax wages and companies employ people in your jurisdiction then they have to remit the tax. If you tax sales and people buy things in your jurisdiction then companies have to remit the tax. If you tax property and companies own property in your jurisdiction etc. etc. The problem is governments keep trying to tax companies not based on what happens in their jurisdiction but what happens outside of it, which they can only do sometimes, and that gives the companies an opportunity to find ways to make it one of the times they can't. Just stop doing that and tax the things that actually happen in your jurisdiction.
  - tick_tock_tick 3y ago
    Ireland gave Apple a tax deal. The EU is arguing Ireland as part of the EU is not allowed to set it's own tax policy. The lack of clarity is Ireland's claiming it's still a sovereign nation and can set taxes but the EU says no you're not.
    - s1artibartfast 3y ago
      That's not true. EU nations set their own tax policy freely. That's why the EU is claiming it isn't simply a tax issue, but a hidden subsidy. The EU already lost once, but they are trying again
      - tick_tock_tick 3y ago
        If lower tax rates are a "hidden subsidy" then clearly they can't set their own tax policy freely....
        s1artibartfast 3y ago
        Well clearly there is a lot more to this situation if you want to actually look at it.
- hef19898 3y ago
  Let's assume the law isn't clear, ans since I am no tax lawyer I actually cannot tell either way, pursueing that clarity at court is exactly what I would expect from Apple and the EU to do. So, the system is working as expected here.
  - AnthonyMouse 3y ago
    If the system was well-functioning the tax law would be clear enough that it doesn't take a team of lawyers and courts to know what's permitted. How is anyone supposed to arrange their affairs if the law they're going to be subjected to isn't established until after the fact?
    - hef19898 3y ago
      Laws are never are clear enough, there is always room for interpretation. Laws are not some piece of software that give predctable answers, hence courts and the whole legal system. And it is the latter one atvwork here, as intended.
      - AnthonyMouse 3y ago
        This is a rationalization for convoluted legislation. The impossibility of perfection is a poor excuse for mediocrity. Notice that we almost never hear about corporations avoiding payroll taxes or VAT. They avoid this kind of tax in particular because the rules are unusually squishy and incoherent, and every time they find another way to do it, governments respond by making it more complicated or even less coherent instead of addressing the root cause and replacing it with something clearer and simpler.
        desas 3y ago
        Countries in Europe have been gradually tightening up on corporations avoiding payroll taxes by declaring employees as contractors. In the UK it's known as IR35 working. The EU have recently proposed the platform working directive, aimed straight at this problem.
LanceH 3y ago
They paid taxes according to the laws of a sovereign nation. Seems like a done deal to me. Europe should get their affairs in order. If Ireland shouldn't have done that, that's not Apple. It really seems like a case of "the law should have been", which seems to work in Europe.
- lokar 3y ago
  In regards to taxation and regulation of services sold into the EU common market Ireland is not fully sovereign. They have their act together, this is the legal process playing out.
  - Kamq 3y ago
    Aren't they still sovereign? They just might be sanction/fined by peers or kicked out of the union if they don't comply? It's not like someone's going to declare war on Ireland and conquer them to force compliance the way a citizen breaking the law might be conquered by a police force.
    - ben_w 3y ago
      The winning move for a single round of the Prisoner's Dilemma is to defect. The winning move for the Iterated Prisoner's Dilemma is tit-for-tat. Enforcement mechanisms lead actors to behave more cooperatively, and everyone knows everyone is better off if everyone is cooperating.
      - Kamq 3y ago
        That doesn't make anyone in the game not sovereign
        ben_w 3y ago
        The enforcement mechanism is a voluntary de jure loss of sovereignty, even though the de facto sovereignty to leave the enforcement mechanism remains.
gigatexal 3y ago
If I was Apple or any other megacorp I would happily pay the taxes and pay them publicly because of all the goodwill and favors and all the greased politicians and folks it can buy. It’s less hassle than lawyering and cheaper and instead you can focus on building relationships or getting other benefits than hoarding cash which Apple clearly can print like a central bank.
- generic92034 3y ago
  But someone would not have been promoted (or would not have gotten a huge bonus) without taking advantage of that perceived tax loophole! /s
- ant6n 3y ago
  Seems like there would be cheaper ways to buy good will greased politicians.
- londons_explore 3y ago
  That might be the case for super local taxes (eg. Paying land tax to the town), but for nationwide taxes even a big company makes basically no difference. Therefore, politicians don't really care - it isn't their money and doesn't directly impact them.
- newZWhoDis 3y ago
  Elon paid one of the largest (the largest?) personal tax bills ever. How’s that working out for him?
  - gigatexal 3y ago
    Well he does enough self owning to erode any good will he’s ever earned. You can’t fix stupid. The man is a genius but socially very stupid.
justincormack 3y ago
Ireland didn't want Apple to pay either, as they wanted to be able to keep doing this sort of deal.
- nannal 3y ago
  It's in Ireland's best interest: https://en.wikipedia.org/wiki/Put_on_the_green_jersey https://en.wikipedia.org/wiki/Put_on_the_green_jersey
  - vasdae 3y ago
    That's the way countries should behave generally.
    - nicce 3y ago
      Countries set the bar for human rights, morale and ethics. What if they don’t matter if some provides the money?
  - MuffinFlavored 3y ago
    > https://www.freshbooks.com/glossary/tax/double-irish-dutch-sandwich https://www.freshbooks.com/glossary/tax/double-irish-dutch-s... > https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement > https://en.wikipedia.org/wiki/Ireland_as_a_tax_haven https://en.wikipedia.org/wiki/Ireland_as_a_tax_haven What portion of Ireland's GDP is "American multinational companies" using them for tax avoidance? As long as it is legal for Apple to route the money it makes in America back to shell companies in Ireland and pay 12.5% corporate tax instead of something higher elsewhere, why would it ever stop?
    - extraduder_ire 3y ago
      Around 23% in 2020, based on the difference between GNI* and GDP. It has been higher than that in the past, but increased medical manufacturing pushed it back. It's not just American companies, but they're certainly the largest. The most notable effect here is that you learn to be wary of any stat mentioning "GDP" or "GDP per capita". In 2015, when the US cut-off date for many of these transfers hit, the CSO refused to release accurate corporate tax numbers because it would have identified the companies involved.
CamperBob2 3y ago
What do you tell your CPA to do, when tax time rolls around?

by izacus 3y ago

todd-davies 3y ago

For sure they are throwing lawyers at it. It's 13bn after all. But the underlying reason for the appeal is the same; the law is not yet clear as to what should happen.

izacus 3y ago
Where do you see the lack of clarity? A wish to avoid paying is not lack of clarity.
- s1artibartfast 3y ago
  The case is between the Irish government and the EU. Ireland made a a tax deal with Apple. Ireland also made a no corporate subsidy deal with the EU. EU wants apple taxed. Ireland says a tax break is not a subsidy, and a subsidy would be if they gave Apple grants, funds, or special loans
  - AnthonyMouse 3y ago
    > Ireland also made a no corporate subsidy deal with the EU. That seems odd. For example, if the government provides a national healthcare system, this is effectively a subsidy to employers who can then avoid providing a health plan their employees might otherwise demand or otherwise have to pay them more to compensate for their need to pay for their own healthcare. How is this being distinguished from any other form of subsidy? Isn't subsidizing things what governments do with tax money?
    - padjo 3y ago
      Bans on state subsidies are a core principle that enables the EU single market. Otherwise the market could easily be distorted by state aid. However it’s far from simple in practice and is something the member states have been arguing about forever. The rest of the eu has never been happy with irelands tax policy but since taxation is a national competency they can’t do anything about it directly. They can however frame it as state aid and try to attack it that way. Edit to add, information on how state aid works in eu context: https://enterprise.gov.ie/en/what-we-do/eu-internal-market/eu-state-aid-rules/ https://enterprise.gov.ie/en/what-we-do/eu-internal-market/e...
      - AnthonyMouse 3y ago
        > Bans on state subsidies are a core principle that enables the EU single market. Otherwise the market could easily be distorted by state aid. It seems impossible to avoid this. If one state spends money on something that benefits businesses and another spends it on something else, those businesses will prefer the first one. But this isn't actually that much of a problem because each state has finite resources and its people get to decide how to use them. If one wants to have a UBI (which might increase entrepreneurship and the number of small businesses engaged in taxable activity) and another wants to lower unemployment by attracting large employers with subsidies and a third just wants to have lower taxes, what's the problem? That one might actually work better than another?
- NoboruWataya 3y ago
  Without getting into the nitty gritty of it, it seems pretty obvious that there is a lack of clarity given that the European Commission came to one conclusion, the General Court concluded that the European Commission was incorrect and now an advocate general for the European Court of Justice has concluded that the General Court was incorrect. These are all smart people who have spent a lot of time and effort studying the law in this area. There are a lot of extremely reductionist takes on the case in the media but the actual legal principles in dispute, and their application to the facts, are quite complex.
  - izacus 3y ago
    You keep mixing up "muddying the waters to avoid paying tax" and "lack of clarity" The "lack" you speak of is generated by a megacorporation to avoid paying their part - and you keep attributing it to the wrong party.
    - TrapLord_Rhodo 3y ago
      It's not apple V. EU. It's Ireland Vs. EU. The real crux of the argument is; Does Ireland have the authority to grant Apple it's deal.
    - NoboruWataya 3y ago
      It is the EU institutions who are disagreeing with each other, Apple have nothing to do with it. The General Court of the EU isn't muddying the waters to help Apple avoid paying tax. This is the General Court's judgment by the way: https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:62016TJ0778 https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:62...
    - AnthonyMouse 3y ago
      Corporations will always attempt to lower their costs. It's like blaming the rain for being wet. It isn't inherently necessary to have a tax system so convoluted that these games are even possible. If you tax wages and companies employ people in your jurisdiction then they have to remit the tax. If you tax sales and people buy things in your jurisdiction then companies have to remit the tax. If you tax property and companies own property in your jurisdiction etc. etc. The problem is governments keep trying to tax companies not based on what happens in their jurisdiction but what happens outside of it, which they can only do sometimes, and that gives the companies an opportunity to find ways to make it one of the times they can't. Just stop doing that and tax the things that actually happen in your jurisdiction.
- tick_tock_tick 3y ago
  Ireland gave Apple a tax deal. The EU is arguing Ireland as part of the EU is not allowed to set it's own tax policy. The lack of clarity is Ireland's claiming it's still a sovereign nation and can set taxes but the EU says no you're not.
  - s1artibartfast 3y ago
    That's not true. EU nations set their own tax policy freely. That's why the EU is claiming it isn't simply a tax issue, but a hidden subsidy. The EU already lost once, but they are trying again
    - tick_tock_tick 3y ago
      If lower tax rates are a "hidden subsidy" then clearly they can't set their own tax policy freely....
      - s1artibartfast 3y ago
        Well clearly there is a lot more to this situation if you want to actually look at it.
hef19898 3y ago
Let's assume the law isn't clear, ans since I am no tax lawyer I actually cannot tell either way, pursueing that clarity at court is exactly what I would expect from Apple and the EU to do. So, the system is working as expected here.
- AnthonyMouse 3y ago
  If the system was well-functioning the tax law would be clear enough that it doesn't take a team of lawyers and courts to know what's permitted. How is anyone supposed to arrange their affairs if the law they're going to be subjected to isn't established until after the fact?
  - hef19898 3y ago
    Laws are never are clear enough, there is always room for interpretation. Laws are not some piece of software that give predctable answers, hence courts and the whole legal system. And it is the latter one atvwork here, as intended.
    - AnthonyMouse 3y ago
      This is a rationalization for convoluted legislation. The impossibility of perfection is a poor excuse for mediocrity. Notice that we almost never hear about corporations avoiding payroll taxes or VAT. They avoid this kind of tax in particular because the rules are unusually squishy and incoherent, and every time they find another way to do it, governments respond by making it more complicated or even less coherent instead of addressing the root cause and replacing it with something clearer and simpler.
      - desas 3y ago
        Countries in Europe have been gradually tightening up on corporations avoiding payroll taxes by declaring employees as contractors. In the UK it's known as IR35 working. The EU have recently proposed the platform working directive, aimed straight at this problem.

LanceH 3y ago

They paid taxes according to the laws of a sovereign nation. Seems like a done deal to me. Europe should get their affairs in order. If Ireland shouldn't have done that, that's not Apple. It really seems like a case of "the law should have been", which seems to work in Europe.

lokar 3y ago
In regards to taxation and regulation of services sold into the EU common market Ireland is not fully sovereign. They have their act together, this is the legal process playing out.
- Kamq 3y ago
  Aren't they still sovereign? They just might be sanction/fined by peers or kicked out of the union if they don't comply? It's not like someone's going to declare war on Ireland and conquer them to force compliance the way a citizen breaking the law might be conquered by a police force.
  - ben_w 3y ago
    The winning move for a single round of the Prisoner's Dilemma is to defect. The winning move for the Iterated Prisoner's Dilemma is tit-for-tat. Enforcement mechanisms lead actors to behave more cooperatively, and everyone knows everyone is better off if everyone is cooperating.
    - Kamq 3y ago
      That doesn't make anyone in the game not sovereign
      - ben_w 3y ago
        The enforcement mechanism is a voluntary de jure loss of sovereignty, even though the de facto sovereignty to leave the enforcement mechanism remains.

gigatexal 3y ago

If I was Apple or any other megacorp I would happily pay the taxes and pay them publicly because of all the goodwill and favors and all the greased politicians and folks it can buy. It’s less hassle than lawyering and cheaper and instead you can focus on building relationships or getting other benefits than hoarding cash which Apple clearly can print like a central bank.

generic92034 3y ago
But someone would not have been promoted (or would not have gotten a huge bonus) without taking advantage of that perceived tax loophole! /s
ant6n 3y ago
Seems like there would be cheaper ways to buy good will greased politicians.
londons_explore 3y ago
That might be the case for super local taxes (eg. Paying land tax to the town), but for nationwide taxes even a big company makes basically no difference. Therefore, politicians don't really care - it isn't their money and doesn't directly impact them.
newZWhoDis 3y ago
Elon paid one of the largest (the largest?) personal tax bills ever. How’s that working out for him?
- gigatexal 3y ago
  Well he does enough self owning to erode any good will he’s ever earned. You can’t fix stupid. The man is a genius but socially very stupid.

justincormack 3y ago

Ireland didn't want Apple to pay either, as they wanted to be able to keep doing this sort of deal.

nannal 3y ago
It's in Ireland's best interest: https://en.wikipedia.org/wiki/Put_on_the_green_jersey https://en.wikipedia.org/wiki/Put_on_the_green_jersey
- vasdae 3y ago
  That's the way countries should behave generally.
  - nicce 3y ago
    Countries set the bar for human rights, morale and ethics. What if they don’t matter if some provides the money?
- MuffinFlavored 3y ago
  > https://www.freshbooks.com/glossary/tax/double-irish-dutch-sandwich https://www.freshbooks.com/glossary/tax/double-irish-dutch-s... > https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement > https://en.wikipedia.org/wiki/Ireland_as_a_tax_haven https://en.wikipedia.org/wiki/Ireland_as_a_tax_haven What portion of Ireland's GDP is "American multinational companies" using them for tax avoidance? As long as it is legal for Apple to route the money it makes in America back to shell companies in Ireland and pay 12.5% corporate tax instead of something higher elsewhere, why would it ever stop?
  - extraduder_ire 3y ago
    Around 23% in 2020, based on the difference between GNI* and GDP. It has been higher than that in the past, but increased medical manufacturing pushed it back. It's not just American companies, but they're certainly the largest. The most notable effect here is that you learn to be wary of any stat mentioning "GDP" or "GDP per capita". In 2015, when the US cut-off date for many of these transfers hit, the CSO refused to release accurate corporate tax numbers because it would have identified the companies involved.

CamperBob2 3y ago

What do you tell your CPA to do, when tax time rolls around?