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Apple must pay 13B euros in back taxes, EU's top court rules

• InsomniacL 2y ago
  Seems wrong that Ireland cheated the system to attract tech companies then also gets a huge payout.
  • csomar 2y ago
    The idea was that these big companies will move back to the big centers (Paris/Frankfurt) once they have to pay the same taxes. That didn't happen (surprise) and Ireland is now ending up with a tax deluge and high value tech companies.
    • quonn 2y ago
      The idea was that these big companies and the Irish government obey the law.
      • fullspectrumdev 2y ago
        What’s interesting is the deal Apple got was fine under Irish law at the time. Nobody foresaw how things would pan out literally decades later.
        • izacus 2y ago
          Irish law yes, EU law no. It's like saying that you couldn't forsee a state law overriding a lower level region/county law.
          • piltdownman 2y ago
            That's not how the EU works. To give just one major example, our constitution regularly overrules EU law - Ireland has to go to referendum for Treaties - e.g. The Lisbon Treaty.
            • quonn 2y ago
              EU law has precedence, period.
              • piltdownman 2y ago
                No, no it doesn't. The primacy of EU law is completely negated in a number of fairly basic instances - the common market first and foremost. Specifically for Ireland, we are the only EU member state that are obliged to hold public referendums on Treaties. Ratification of the Treaty in all other member states is decided upon by the states' national parliaments. Ireland, Netherlands, and Luxembourg also have veto powers when it comes to EU wide regulations. That's why Article 116 exists. You don't know what you're talking about.
                • izacus 2y ago
                  Your interpretation just lost in court, so who here doesn't know what they're talking about?
                  • piltdownman 2y ago
                    It's literally enshrined in German Case Law as 'Identitätsvorbehalt'. The Polish constitutional court OUTRIGHT ruled that EU law does not supercede national law. Thus, primacy of EU law is wholly rejected in Poland. https://www.euronews.com/2021/10/07/polish-court-rules-some-eu-laws-clash-with-country-s-constitution https://www.euronews.com/2021/10/07/polish-court-rules-some-... I could go on, but responding to Dunning-Kruger commentary is a Pyrrhic battle at best.
                    • izacus 2y ago
                      Why are you talking about Poland in Irish case now? :) A case which questions the ability of EU to override Polish consistution. Did you establish that corporate tax law is a consistutional issue? And note that the decision the tribunal has made that redress for differences between EU law and Polish law will have to be handled by: leaving EU, changing the constitution or changing the EU law. I'm not sure Poland wants to push that.
        • quonn 2y ago
          > literally decades later. So given the time value of money, Apple still has an unfair advantage?
          • Nemo_bis 2y ago
            Actually Apple is supposed to pay interest as well, but it's probably going to be a very low "legal interest rate". From the original decision: ---- 1. Ireland shall recover the aid referred to in Article 1(1) from Apple Sales International. 2. Ireland shall recover the aid referred to in Article 1(2) from Apple Operations Europe. 3. The sums to be recovered shall bear interest from the date on which they were put at the disposal of the beneficiaries until their actual recovery. 4. The interest shall be calculated on a compound basis in accordance with Chapter V of Regulation (EC) No 794/2004. ---- https://eur-lex.europa.eu/eli/dec/2017/1283/oj https://eur-lex.europa.eu/eli/dec/2017/1283/oj Linked in https://curia.europa.eu/jcms/upload/docs/application/pdf/2024-09/cp240133en.pdf https://curia.europa.eu/jcms/upload/docs/application/pdf/202...
      • piltdownman 2y ago
        All tax treaties and agreements between countries (including intra-EU) are bilateral country to country agreements. Most are refreshed every 3-7 years based on OECD (or EU) recommended standards. Ireland's laws and treatment are 100% compliant. Rather than competing and reducing their tax rates countries like France prefer to moan, as politically they can’t be seen to favour big bad businesses. This of course was no problem with the EEC where Germany, France and the other ex-colonial powers made out like bandits selling their coal and steel to Ireland and the CT being paid there. Enter an English-language dominated SaaS economy from the 90s and they got caught out as they were more interested in domestic economic protectionism than dealing with the realities of a paradigm shift towards tech. We pivoted completely to an information economy and service based economy from a predominately agrarian one. Now have a look at the tech job market in 2024 in Dublin versus Paris, Frankfurt, Berlin, Barcelona etc.. If any one of our EU or the other non EU countries were really dissatisfied with Ireland, they have the right to withdraw at any time.
        • quonn 2y ago
          Look, it's nice that Ireland is finally not a poor country anymore. That's primarily due to EU politics and support. It is, however, economically nowhere even close to France or Germany, no matter how large you think the "tech job" market there is [0]. > If any one of our EU or the other non EU countries were really dissatisfied with Ireland, they have the right to withdraw at any time. Who should withdraw from what? [0] For the facts regarding economic strength, read this document by the central bank of Ireland. https://www.centralbank.ie/docs/default-source/publications/economic-letters/vol-2021-no-1-is-ireland-really-the-most-prosperous-country-in-europe.pdf https://www.centralbank.ie/docs/default-source/publications/...
          • piltdownman 2y ago
            How could we be? We're not a post-colonial power like France or Germany who spent years exploiting the African continent in egregious human rights violations. It is literally only since 2021 that we have reached our pre-English Genocide population levels of 1851 https://www.theguardian.com/world/2021/aug/31/ireland-population-surpasses-5m-for-first-time-since-1851 https://www.theguardian.com/world/2021/aug/31/ireland-popula... Germany has 20x our population, France is not far off it. Neither has anything close to the job market per capita in the IT and Services sector that Ireland has. As for us dragging ourselves up, that has more to with our special relationship with the US. The EU were initially helpful with infrastructural development, access to a Common Market, and to drag us out of the Vatican Law era, but we gave up a huge amount of fishing rights to do so - massively enriching spain, portugal and france who had overfished their own waters. Note also we're not part of Schengen, but maintain a CTA (Common Travel Area) with the UK. Eventually the EU took the legs out from under us in 2008 and forced us at gunpoint to bail out unsecured german bondholders to maintain the integrity of the Euro and prevent a contagion run on German Banks. Irelands FDI sector was highly developed in the late 80s and combined with entities like Enterprise Ireland - ranked first in the world of venture capital investors by deal count in 2020 - hammered home the advantage via our highly-educated English speaking workforce and relatively low cost of living. Even now the number of investments completed by Enterprise Ireland was 42% more than its nearest competitor, French sovereign wealth fund Bpifrance.
      • dachworker 2y ago
        The law forbids the rich and poor alike from sleeping under bridges. The law in the EU is written the France and Germany.
        • tankenmate 2y ago
          "The law in the EU is written the France and Germany."; that is an overt oversimplification. Obviously France and Germany have more influence in the EU than other member states, but it is by no means a monopoly.
    • Hamuko 2y ago
      Ireland has a pretty big advantage for getting big American companies to settle there since it's the only place in EU where English is the official language. Well, technically Malta also exists, but I imagine that not a lot of companies are looking to set up on a small island the size of Kansas City.
      • dachworker 2y ago
        It's not just the language. It's also the culture. In fact I would say the culture is even more important. Germans and Americans wouldn't understand each other, even if they spoke the same culture. Their understanding of how life works, their worldview, their expectation of others, ...etc all of these are quite different. For example, a project is ongoing, but in the course of completing the todo list, it is apparent that a certain issue is going to prop up. An American would immediately jump on it, try to fix it and then make sure to boast about it at the next meaning to take the credit. A German would either ignore it completely because it is not part of his responsibilities or bring it up at the next meeting, but not before finishing the todo list as planned even if the last points are rendered obsolete by the emergence of this issue. And when the American starts presenting his solution at the meeting, the German will feel slighted and held out of the loop, and all sorts of confused that this guy acted so independently and out of line, without following procedure. Just an example. There are whole courses about the different corporate cultures and how people find it hard to work in different cultural environments. I am sure the Americans prefer to work with the Irish who although they don't have the same culture, I never heard of major issues in communication between the those two cultures.
        • tankenmate 2y ago
          Not just the culture; Irish law is based on common law, something that Ireland and the US share. Most other EU states use a civil law basis.
  • eesmith 2y ago
    I think you should be cautious about saying "Ireland cheated the system". The onus is placed more directly on the Irish tax authority, and then more broadly the government, and then more broadly the voting population, and only then the entire population. Consider how the ruling says "Ireland had renounced tax revenue, which had given rise to a loss of State resources". This means many people living in Ireland got less government resources than they would have, including people like children and immigrants who did not have the right to vote so cannot be said to have been involved in the cheating, even though they are part of Ireland. Legally speaking it's not a "payout" but "recovery of unlawful state aid."
    • InsomniacL 2y ago
      > This means many people living in Ireland got less government resources than they would have No it doesn't. Ireland did this deal to benefit from it. What they lost from direct tax in one area they gained in others. Had Ireland not made this deal, it's unlikely it would have become the conduit for Apple profits from around the world. The subject of the ruling contains "concerning tax rulings issued by Ireland in favour of Apple" Just because a country has children and immigrants does not absolve it of criticism.
      • izacus 2y ago
        Can you explain where exactly did Ireland gain benefit from not collecting these taxes?
        • dylanredm0nd 2y ago
          The jobs provided via Apple, FDI in Ireland, Tax paid by apple staff in Ireland... general spend?
          • izacus 2y ago
            There is just a tiny count employees in Ireland, mostly legal to run the sandwitch.
  • oliwarner 2y ago
    As Ireland are still saying, this €13bn (plus interest) is going to work against them. It's supposed to work against them, as a chilling effect for any company trying to work EU states against each other for preferential treatment. I'm sure Ireland will argue that they'll offer any multi-billion multinational this sort of treatment, but that's really the point. The EU doesn't want a race to the bottom and if EU-local businesses are unable to leverage this sort of accounting break, it's a massive leg up for external businesses. While this is a large lump, this fine covers a decade of accounts, and this final decision comes 32 quarters after the original fine. Each of those quarters could have paid this off from flat profit. They're doing okay.
    • tankenmate 2y ago
      While I largely agree, I don't think there is any fine involved; it is just a requirement for Ireland to collect taxes that the ECJ says Apple should have paid. Hence not a fine.
      • oliwarner 2y ago
        You're right, of course, but Apple and Ireland won't see it that way ;)
  • deleted 2y ago
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• Laaas 2y ago
  It seems that Ireland giving aid specific to Apple and not others is the crux of the issue? Not sure how that’s illegal.
  • tomschwiha 2y ago
    I guess there are some rules setup in Europe so countries do not try to "cheat" the system (getting benefits from membership in the EU, avoiding regulation). It's sort of people want to avoid taxes but demand perfectly maintained roads, etc.
  • nsajko 2y ago
    Ireland giving special benefits to a private company like Apple conflicts with the principles of a free and fair market.
    • mutatio 2y ago
      Because tax incentives do not exist in the EU, like the German car industry.
      • jajko 2y ago
        Of course it does. Now why EU should finance foreign company trying to circumvent local taxes like some chinese sweatshops vs local massive company that gives work to hundreds of thousands local people? US does exactly the same, also in car manufacturing. This is normal market behavior, countries protect their companies. Apple has nothing substantial in EU, completely foreign force milking the market and paying nothing in taxes. Now if they opened big factories and research centers, they would be treated very differently but they prefer Foxconn or other chinese companies.
        • mutatio 2y ago
          Ireland having tax sovereignty was doing what it felt was best for itself, the low tax ecosystem it has fostered is in its benefit. Much like car and farming tax incentives favour Germany and France respectively. Now perhaps the EU as a entity is moving towards collective taxation policies, but it's not there yet and there's still an aspect of getting away with certain fiscal policies depending on any member nations "clout". Perhaps Ireland is mostly guilty of not having said clout.
• Nursie 2y ago
  Good. Not because I particularly dilike Apple or big US tech firms (I have a whole bunch of Apple stuff right here), but because Ireland has been able to undermine the tax regime of the whole EU, by giving these sweetheart tax deals to big firms, who can then run their entire EU business from there. This gives an unfair tax advantage to the multinationals over homegrown EU companies, skewing the market. Is it Apple's 'fault'? That's not really the interesting question here, IMHO.
  • Etheryte 2y ago
    Yeah, agreed, Apple is simply doing what any corporation does, trying to do business as profitably as possible. The only tar bucket you should be having handy is for Ireland for trying to screw over the whole rest of EU.
    • xbmcuser 2y ago
      Why do you give Apple the leeway to do what a company has to and not Ireland to do what a country has to succeed that's very hypocritical of you.
      • Etheryte 2y ago
        Because Ireland has joined the EU and knowingly chosen to participate in treaties pertaining to the shared market. If Ireland wanted to leave the EU then it would be free to do so, then it can cut Apple all the tax breaks it wants. However as is, Ireland is trying to please two masters at the same time and the court cases seem pretty clear about how that is going for them.
        • xbmcuser 2y ago
          Apple willingly sold in the eu then found loopholes to save on tax. They created shell corporratioms to save on tax yeah Apple is correct and Ireland is only one in the wrong.
      • whacko_quacko 2y ago
• techpression 2y ago
  Why is it Apple that has to pay for what Ireland did wrong? Genuinely curious here, it's not like Ireland is some random dude on the internet selling stolen goods and Apple should've known better.
  • tomschwiha 2y ago
    I guess it's within the power of legislation that the wrongly calculated taxes are now corrected.
    • techpression 2y ago
      Sure, but Ireland doesn’t get the money, the EU does, so it’s not actually correcting the taxes but rather redistribute them, which seems like a bit of totalitarian approach to regulation. Ireland did not want the money back.
      • scandox 2y ago
        Ireland gets the money. The EU is making Apple pay us. And yes we didn't want it - mainly for reputational reasons and partly because our argument was "we never done it".
        • techpression 2y ago
          I stand corrected then, thanks. I was under the assumption this is like most legal wins for the EU that it goes into the pot to lower member fees.
          • dathinab 2y ago
            oversimplified you can think of it as Ireland is required to collect the taxes it always should have collected (but waved to get a competitive advantage for attracting tech giants and giving them in turn a competitive advantage over EU based competition) as a side note tax benefits to attract companies aren't perse illegal but what Ireland did went far beyond what is healthy/acceptable for the EU
• kasperni 2y ago
  Some important context that are in every European media, but apparently not the American ones [1]. Apple said in 2017 that it had an effective tax rate of 21 percent on foreign earnings. The Commission said its effective tax rate on European profits was 1 percent in 2003 and 0.005 percent in 2014. [Edit] To be fair to CNBC they did cover the tax structure Apple set up some years ago [2]. [1] https://www.politico.eu/article/commission-scores-surprise-win-in-apple-tax-row/ https://www.politico.eu/article/commission-scores-surprise-w... [2] https://www.cnbc.com/2016/08/30/how-apples-irish-subsidiaries-paid-a-0005-percent-tax-rate-in-2014.html https://www.cnbc.com/2016/08/30/how-apples-irish-subsidiarie...
• megous 2y ago
  [flagged]
  • 620gelato 2y ago
    Just FYI, the actual headline doesn't include the word Tech. It's filed under Tech category, and I'm guessing OP messed up copy pasting.
    • megous 2y ago
      Talking about comissioner as a czar...
  • phito 2y ago
    Tech Apple is ran by Tim Apple
• librasteve 2y ago
  prior to brexit, the UK lost a ton of US inward direct investment to Eire … Dell, Intel, Apple etc. the factors were Eire corporation tax was low and public policy was to footdrag in the attempts to set an EU minimum tax, fantastic lobbying by Irish representatives in Washington leveraging the big Irish diaspora, big subsidies that walked to the edge of the EU rules (as seen here), and an English speaking workforce with ability to bring in speakers of all national languages for EU wide customer support meantime the UK civil service was gold plating the EU rules and then came the brexit disaster
  • HPsquared 2y ago
    The UK government seems intent on getting the "worst of both worlds" out of every single issue.
    • tailspin2019 2y ago
      The previous one seemed to. The jury is out on the current one.
      • graemep 2y ago
        AT best it will be similar. SO far the main difference seems to be a willingness to be harsher to old people and those on moderate (not minimum wage, but lowish to average) incomes.
        • oliwarner 2y ago
          > harsher to old people Old people not on pension credit. The old WFP was £300 in the pocket of every pensioner, regardless of means and that's a stupid thing for a government to be paying for when it's trying to balance the books. I do accept the problem —as with many means-tested benefits— is catching and supporting the people who don't qualify, haven't filled in the paperwork, and still vitally need the support the WFP gave them. The DWP has to be given the support to help people who need it, and quickly, especially in Y1. But I think they're getting way too much stick for this.
• ThePowerOfFuet 2y ago
  Direct link to the full text of the judgment: https://curia.europa.eu/juris/document/document.jsf?text=&docid=289923&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=1271245 https://curia.europa.eu/juris/document/document.jsf?text=&do...
• Cokainsky 2y ago
  [dead]
• linotype 2y ago
  What does "illegal" mean? Why is it in quotes? Did they break the law or not? If they didn't break the law, if they adhered to the deal they negotiated with Ireland, isn't this a dangerous precedent? You can just ignore deals because you (EU) said so? Edit: Please downvote me if you must but also post a comment about why I'm wrong. Thanks!
  • ko27 2y ago
    > You can just ignore deals because you (EU) said so? Of course you can, because EU law has precedence over Ireland's deal in this situation.
    • linotype 2y ago
      Even if it was legal under the EU at the time? Maybe Ex Post Facto only applies in the US.
      • simongray 2y ago
        It wasn't legal at the time, that's what's just been established by the verdict. Apple (uniquely) having a near zero tax rate is considered illegal state aid to a company. Private companies are supposed to operate on the same terms within each European country.
      • mpweiher 2y ago
        It wasn't.
    • jokethrowaway 2y ago
      I guess what comes as a shock is how much control the EU has. At the same time, if bureaucrauts in Ireland were a bit smarter they could have just written in a special exemption for companies with certain specific requirements - which end up being Apple and a few big ones. Apple was also pretty dumb to go to Ireland while Malta, Cyprus and Bulgaria offer pretty low taxes out of the box. I guess they did that to access UK talent / lower language barrier even if the fiscal setup was riskier.
• seydor 2y ago
  > "We always pay all the taxes we owe wherever we operate and there has never been a special deal," he said. Ιf that is true it should be easy to prove. Letting them pay peanuts is an insult to the whole of EU by the Irish government
  • robertlagrant 2y ago
    Insult-driven thinking is really, really low grade.
    • justinclift 2y ago
      So why do it?
      • robertlagrant 2y ago
        Me? I wasn't insulted.
• gzer0 2y ago
  I found some rather troubling aspects within the ruling itself: 1. Retroactive application of arm's length principle The Court's reliance on the arm's length principle, despite acknowledging it's not required by EU law, is problematic. As stated in paragraph 124: > "Article 107(1) TFEU gives the Commission the right to check whether the level of profit allocated to such branches... corresponds to the level of profit that would have been obtained if that activity had been carried on under market conditions." This retroactive application of a principle not explicitly required by law at the time of the tax rulings is unfair and creates legal uncertainty for businesses. 2. Burden of proof The Court's criticism of the General Court's approach to evidence, as noted in paragraph 245, lowers the burden of proof for the Commission in State aid cases: > "As the Commission stated in recital 441 of the decision at issue, its approach is based on an infringement of Article 107(1) TFEU, which has been part of Ireland's legal order since its accession in 1973, and not on a failure to have regard to the framework defined at OECD level." This shift unfairly advantages the Commission in future cases and will lead to increased challenges to legitimate tax arrangements. But, overall, yes, I get the concerns about legal certainty and applying rules retroactively. They're valid points. But when I weigh everything, I still think this ruling does more good than harm. It's a big step towards fairer taxes and more transparency in how big companies operate. Yes, it might ruffle some feathers in the short term. But in the long run, it's setting us up for a tax system where everyone plays by the same rules – whether you're a small local business or a tech giant.
  • skummetmaelk 2y ago
    There's not much uncertainty for business really. If you're pulling the moves that Apple and other companies pull to "optimize tax", then you are with 100% certainty trying to game the system and violating the spirit of the law.
    • yieldcrv 2y ago
      That doesnt mean regimes we respect should retroactively apply new rules in unpredictable ways
      • 2y ago
• andy_ppp 2y ago
  It would just be really good if companies stopped avoiding tax. Most countries are already pretty much bankrupt - it's worth thinking about for every debt (US National Debt is $35.35 trillion!!) there is a rich person on the end of it with the loan as an asset earning interest. If companies avoid tax and rich people avoid tax it means more tax for normal people who work for a living.
  • Iulioh 2y ago
    Its just the prisoner dilemma. If you don't your competition will. We just need more spine in the country's legislation to close ANY loophole, because this wasn't illegal tax evasion, it was legal tax ellusion. The point is that EU judged this unfair by Ireland and that effectively it stole revenue from other European counties to favor jobs in ireland. Basically saying "you (country) can't have a lower tax rate than X" in our economic union. Smaller countries with few industries would benefit disproportionately from bigger companies moving here the HQ.
    • moomin 2y ago
      A good way of thinking about the EU is as a solution to the prisoner's dilemma.
      • dantheman 2y ago
        The EU is more of a problem than any sort of solution.
      • kamikazeturtles 2y ago
        Do they tax LVMH? Or fine it for monopolistic practices? The EU is a pretty one-sided solution to the prisoner's dilemma
        • gpderetta 2y ago
          > Do they tax LVMH? Any reasons to believe it isn't taxed? > Or fine it for monopolistic practices? Well, currently it is being investigated it seems: https://www.reuters.com/business/retail-consumer/french-police-working-with-eu-luxury-antitrust-probe-2023-04-21/ https://www.reuters.com/business/retail-consumer/french-poli...
• fsflover 2y ago
  Dupe: https://news.ycombinator.com/item?id=41498377 https://news.ycombinator.com/item?id=41498377
• InsomniacL 2y ago
  Somehow Ireland gets a 13 billion euro payday for illegally subsidising Apple so they do business in Ireland.
  • piltdownman 2y ago
    <facepalm> You realise these are American companies exploiting American laws to circumvent their tax burden while operating as MNCs in Europe? The notion of Ireland somehow getting a '13 billion payday' due to malfeasance or illegality is fantastical beyond belief.
    • EduardoBautista 2y ago
      All the tax law says that if they bring the money to the US, they have to pay US taxes. So they just don’t bring it to the US. There is no US law that requires you to move the money.
    • InsomniacL 2y ago
      "According to Commission estimates, Ireland had given illegal tax benefits worth €13 billion to Apple" - ECJ Ireland gave illegal tax breaks to attract business from other countries which it succeeded in, and now also gets the tax back. > fantastical beyond belief You might disagree with something I've said but it's certainly not "fantastical beyond belief"
    • Wytwwww 2y ago
      > MNCs in Europe? Why would you expect them to pay corporate taxes on all the income they make outside of the US? Would hardly make much sense...
  • Rinzler89 2y ago
    The issue isn't with Ireland per se, as if Ireland wouldn't do it, then Netherlands, Luxembourg, Cyprus, Bulgaria or someone else will gladly take Apple's 13 billion at the expense of the other members of union. The right fix would be EU wide legislation to prevent EU member states of fighting against each other on who can screw over the taxpayers by providing the biggest tax breaks in exchange for corporations' bread crumbs in a race to the bottom, as this causes all EU taxpayers to loose and corporations to win, and then we wonder why we have no money for education, healthcare and infrastructure. Well of course we don't if you help big companies avoid paying tax and then your state budget relies only collecting tax from citizens and small business who can't dodge taxes.
• SanjayMehta 2y ago
  I’m confused. So EU runs Ireland’s tax system? What happened to sovereignty? How does this work?
  • lm28469 2y ago
    What do you think a political and economical union does exactly ?
    • SanjayMehta 2y ago
      Lose sovereignty, it appears. Strange.
      • lm28469 2y ago
        Yeah very strange... people get together, vote laws, and respect the laws they voted... how strange indeed You can be for or against the EU but none of that is strange lmao. You can't play the game for the nice rules and say "no" when the rules you don't like affect you
  • Woeps 2y ago
    No, the EU checks if the tax systems are fair and held to certain standards. In this case this special deal was only available to a select few companies.
    • SanjayMehta 2y ago
      Were these companies selected on the basis on employment numbers or revenue? AFAIK Apple doesn’t have so many employees in Ireland that would generate enough revenue for a 13B tax bill. So they must have been booking offshore revenue via an Irish subsidiary. When I buy software licenses here in India I’ve noticed that the billing almost always is in Ireland.
      • lm28469 2y ago
        Ireland doesn't produce anything of value by itself, it's full of ghost offices claiming revenues for the entire EU market.
• deleted 2y ago
  [deleted]
• mrks_hy 2y ago
  Another article: https://www.politico.eu/article/commission-scores-surprise-win-in-apple-tax-row/ https://www.politico.eu/article/commission-scores-surprise-w... Full ruling: https://curia.europa.eu/jcms/upload/docs/application/pdf/2024-09/cp240133en.pdf https://curia.europa.eu/jcms/upload/docs/application/pdf/202... Fascinating, how does that work? Can anybody explain in simpler terms how that was legal to begin with? > Both companies were incorporated in Ireland but not tax resident in Ireland. Those tax rulings approved the methods used by ASI and AOE to determine their chargeable profits in Ireland in relation to the trading activity of their respective Irish branches.
  • red_trumpet 2y ago
    Well, they had Ireland on their side. > "Ireland granted Apple unlawful aid which Ireland is required to recover," the Court of Justice said on Tuesday.
    • Rinzler89 2y ago
      >Well, they had Ireland on their side. This is one of the reasons the EU is set to remove the single country veto rule since it was open to abuse. You'll then need two countries on your side to alter the EU's rulings.
      • anonymousDan 2y ago
        Yeah this is not going to happen.
      • jkaplowitz 2y ago
        > This is one of the reasons the EU is set to remove the single country veto rule since it was open to abuse. You'll then need two countries on your side to alter the EU's rulings. There are definitely countries calling for this rule to be removed or otherwise reformed, but I wasn't aware that the EU "is set" to do it. My understanding is that this change would itself require unanimous agreement in order to make it happen (without effectively forking the EU in an extreme step no country has yet seriously proposed), and that this unanimous agreement is not yet present. Have I missed some recent major announcement on this point? I know the EU Parliament voted about this some months ago, but their wishes on this point will never become EU law through the current procedures without unanimous agreement from the member states.
• aswerty 2y ago
  From discussions in the past, I was under the impression there was general sense that if Ireland should have legitimately taxed them to this degree. That ultimately the taxes owed should probably be paid out to the countries where the sale occurs. As one country reaping the rewards of the tax for the entire European operation would be bizarre, when that country just has a medium sized support/sales operation (which was what Ireland was originally collecting tax on). Does this also have the knock on affect that these companies can now write off this tax so their owed US taxes are much less (assuming they ever repatriate these earning - which they have often avoided to avoid paying US tax)? Anyways, writing the above shows me how much I don't understand about these cases.
  • ajsnigrutin 2y ago
    > That ultimately the taxes owed should probably be paid out to the countries where the sale occurs. This is hard to implement in practice. Imagine selling in a country with 50% tax, and having a country with 10% somehwere, anywhere in the world. For easier math, let's say you buy dildos from a chinese manufacture for 1eur (including shipping), and sell them for 11eur to end customers. You've just earned 10eur, and you're taxed 5eur, giving you 5eur of profit. What you then do is open a company in a low-tax country, the company is "completely independent" and the owner (your cousin) works with both the manufacturer and you. You buy the dildos from your cousin for 10eur, he buys them from china for 1eur has them shipped directly to you, and you sell them for 11eur. So, your cousin earned 9eur, and will pay 10% tax on that (90c, 8.10eur of profit) and you earned 1eur, and will pay 50% tax on that (50c, 50c of profit for you). So instead of paying 5eur in tax, you only paid 1.40eur, and pocketed 8.6eur. Yes, there are some additional costs (another company + paperwork, some percentage for your cousin) but you still earned more. The same can be done with patents and licences, branding deals, etc. Company in rich country made 100M of profits... just have the company in a cheap-tax country charge them 99M for licencing, 1M gets taxed in the expensive-tax country, and 99M in the cheap one.
    • Retric 2y ago
      Multinational corporations have subsidiaries not cousins. A great number of tricks go away if you treat subsidiaries as a single company. Countries are reluctant to pierce the corporate veil, but it’s all arbitrary rules.
• petesergeant 2y ago
  So Ireland double-dipped here by luring the tech companies, and now it gets the foregone tax anyway. Does feel a bit like the EU should get the cash, not the state that was responsible for it
  • sensanaty 2y ago
    Correct me if I'm wrong, but the way I understand it, it's not really like Ireland is demanding Apple pay suddenly, the EU is saying that Apple owes Ireland the 13B and has to make up the losses due to Ireland & Apple colluding to strike an tax deal that is unfair (for all other EU members) for Apple. Ireland itself probably doesn't want to do this, since those deals exist for a reason.
    • guappa 2y ago
      > since those deals exist for a reason. Scam the rest of the EU countries?
    • orwin 2y ago
      To be exact, the ruling is that Ireland gave unfair advantage to Apple, compared to other companies. If Ireland want to set corporate taxes at 1%, it can, but it should be for all companies. Amazon notably didn't get the same deal Apple did, which is anti-competitive.
      • throw310822 2y ago
        Shouldn't Ireland be fined 13 billion from the EU then?
        • SirMittens 2y ago
          This is not a fine, tho. It's just the amount that Apple would have paid in taxes, if the special deal didn't exist. The EU is not imposing any fines on Apple. They're just ordering Ireland to collect the taxes owed to them (Ireland), since the tax deal was found to be unfair/illegal.
• vitus 2y ago
  There's a separate ruling for Google that was released at the same time: Docket: https://curia.europa.eu/juris/documents.jsf?num=C-48/22%20P https://curia.europa.eu/juris/documents.jsf?num=C-48/22%20P Ruling: https://curia.europa.eu/juris/document/document.jsf?text=&docid=289925&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=1316992 https://curia.europa.eu/juris/document/document.jsf?text=&do... And other news reports confirming the same: https://www.reuters.com/technology/eu-court-upholds-googles-27-bln-eu-antitrust-fine-2024-09-10/ https://www.reuters.com/technology/eu-court-upholds-googles-... https://www.bbc.com/news/articles/cjw3e1pn741o https://www.bbc.com/news/articles/cjw3e1pn741o CNN also has links to both (summaries of the) rulings: https://www.cnn.com/2024/09/10/tech/europe-ruling-apple-tax-google-fine https://www.cnn.com/2024/09/10/tech/europe-ruling-apple-tax-...
• anonymousDan 2y ago
  For non-EU readers, note that taxation is explicitly not a competency of the EU (i.e. Ireland can set its tax levels to whatever it wants). The only thing in question here is whether it was applying the same taxation rules to all companies, as granting special exceptions to certain companies could be viewed as state aid (which is not allowed). Ireland claimed it wasn't, the current (over-)ruling says otherwise. This case is also specific to tax rules from many years back. AFAIK the rules have subsequently been tightened and the exemption no longer exists.
  • tiffanyh 2y ago
    What’s interesting is that it’s common for governments to give tax incentives to companies that will result in driving more economic value for their region. Eg Ireland might give a tax incentive if a large Fortune 500 company hires X people in Ireland. Question: does this ruling prohibit that common practice?
    • afiori 2y ago
      No, it just requires for the rule to exist and be used coherently.
    • dtech 2y ago
      Yes, that is exactly the kind of thing that Ireland did and is not allowed in the EU rules. You are allowed to make rules, but you can't offer deals.
    • jemmyw 2y ago
      Kind of. It's already prohibited, depending on what you mean. It would be legal to say all companies can have a tax break if they hire X people in Ireland. It's not legal to give the tax break to one company and deny it to another.
      • noirbot 2y ago
        It does feel a little weird then that Apple is being fined here then? It seems like Ireland did the thing that's against the rules by offering the deal, not Apple? Obviously they worked on it together, but it feels odd that Ireland has now essentially gotten all the benefits of offering this illegal deal by having Apple do business there and now also gets all the back taxes that Apple probably wouldn't have paid to Ireland if they hadn't gotten the deal. That seems like a bit of a perverse incentive for countries to offer deals they may know will get overturned later because they'll get the money eventually.
• jkaplowitz 2y ago
  The Google judgment was also released by the CJEU today, but it was a separate judgment. I've found it by going to the CJEU website https://curia.europa.eu/jcms/jcms/j_6/en/ https://curia.europa.eu/jcms/jcms/j_6/en/ (or https://curia.europa.eu/ https://curia.europa.eu/ and then click on "en" for English), where official CJEU press releases about both the Apple and Google judgments were linked on the left under "News". Here's the CJEU press release about the Google judgment: https://curia.europa.eu/jcms/upload/docs/application/pdf/2024-09/cp240135en.pdf https://curia.europa.eu/jcms/upload/docs/application/pdf/202... Inside that PDF press release, there is a link to to the case docket, including the final judgment and an abstract of the judgment: https://curia.europa.eu/juris/documents.jsf?num=C-48/22%20P https://curia.europa.eu/juris/documents.jsf?num=C-48/22%20P And here's the full judgment linked in the above docket: https://curia.europa.eu/juris/document/document.jsf?text=&docid=289925&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=1316992 https://curia.europa.eu/juris/document/document.jsf?text=&do... The full judgment is available in English and French; the abstract is available in French but not English. I should also note that there were actually four CJEU judgments released today, not two. But the other two were unrelated to tech.
• TrackerFF 2y ago
  It’s a drop in the bucket and cost of doing business.
• postepowanieadm 2y ago
  That will hit Irish economy really hard. Good.
  • calmoo 2y ago
    How's that exactly?
  • piltdownman 2y ago
    Incorrect, and vile.
• verzali 2y ago
  Maybe now the Irish government could do something about the housing crisis. Ah who I am kidding, they'll blow it all on fancy hats or some such.
  • mrspuratic 2y ago
    Good one, have a potato. You know it's EU state aid rules that severely constrain government spending like that?
    • verzali 2y ago
      Is that supposed to be a joke about the famine? It's in poor taste if so. EU state aid rules don't stop governments building houses...
• elAhmo 2y ago
  Even if this sounds like a huge fine, this is effectively meaningless, even if they end up paying it. 13 billion, for a company with market cap of more than 3 trillion is around 0.4% of their cap. Until these fines become meaningful, companies will just continue breaking the law and asking for forgiveness later, as the changes to their market cap can offset this fine in hours.
  • darby_nine 2y ago
    Why would you compare to market cap? The company is going to sink or swim regardless of what the market pegs it at.
    • tbrownaw 2y ago
      It provides an excuse to believe the this is an example of the government not taking bad behavior by corporations seriously.
  • randmeerkat 2y ago
    > Until these fines become meaningful, companies will just continue breaking the law and asking for forgiveness later, as the changes to their market cap can offset this fine in hours. Up until recent years the EU didn’t even know if it could take action against U.S. based tech giants. Now that the EU has established wins in fines, usb-c, user replaceable batteries, and alternate app stores, I expect EU regulators to take even bolder action.
    • sgu999 2y ago
      > Up until recent years the EU didn’t even know if it could take action against U.S. based tech giants. What do you mean by that? Due to geopolitics? Or at a technical level of the current law?
      • randmeerkat 2y ago
        > What do you mean by that? Due to geopolitics? Or at a technical level of the current law? Geopolitics, but the technical level of law certainly plays a part. Europe had no idea what the effect of leveling lawsuits against a fortune one company would yield. However the EU has proven rather adept at identifying technological practices harming consumers and a strong capacity for rectifying them. Now that the EU is beginning to find its stride, I expect it to become more assertive in how international commerce is conducted.
• ghusto 2y ago
  > Apple, however, said in a statement: "The European Commission is trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the US." My understanding is that the U.S.A. double-taxes both corporations operating abroad, as well as it's own expats. If this is true, then it's quite the remark to say _the country you're actually in_ is the one double-taxing you. The fact that your "income was already subject to taxes in the US" isn't the fault of the hosting country.
  • hayd 2y ago
    Expats aren’t double taxed but you need to file tax returns to offset taxable income that’s already been taxed. There are specific agreements to avoid double taxation but it’s unclear/unlikely the IRS are just going to hand back money Apple already paid (it likely falls outside of what’s required in those international agreements). Companies, and people, make decisions based on the tax laws of the day eg deciding to work in the UK, Ireland or the US. States shouldn’t be able to simply retroactively change the tax rules and take money already earned and already taxed. If they can do it to Apple, why not to regular citizens?
    • timcederman 2y ago
      Expats are absolutely double taxed, just less so (and to be clear - majority cases not at all) when a DTA is in effect.
      • tansan 2y ago
        In what cases are Americans abroad getting double taxed for the majority of the cases? Don't they have foreign income exclusion?
    • ghusto 2y ago
      > Expats aren’t double taxed but you need to file tax returns to offset taxable income that’s already been taxed. There are specific agreements to avoid double taxation Glad to hear it, because what Americans told me (that they get taxed for the same money they paid tax on in their host country) is bonkers. EDIT: Seems there's some disagreement ;) The other commentor echoes what I've heard from Americans living in Europe. Absolute madness. I also heard it's very costly to try and give up your American citizenship, exactly to protect that juicy free tax America gets from it's expats. > If they can do it to Apple, why not to regular citizens? They already do. Knowledge worker migrants were promised eight years of tax breaks by the Dutch government, who later changed their minds after those people already moved to the Netherlands. This isn't even that though, this is the EU saying the agreement made by Ireland with Apple wasn't legal. It's like how they get people who avoid tax by finding loopholes to pay back-taxes once the tax office catches them (yes, this happens too).
• chrismcb 2y ago
  I don't understand why this is Apple's fine and not Ireland's?
  • oblio 2y ago
    It's not a fine. The EU is saying: "You know those taxes you didn't pay and Ireland looked the other way because it benefitted them? Ireland couldn't look the other way because they signed an agreement with 25+ other countries to not do that, so be a good sport and pay all those taxes we told you to".
    • jacobgkau 2y ago
      "I'm not making you pay me. My boss is making you pay me. So don't be mad at me, be mad at my boss while I get your money."
      • oblio 2y ago
        Ireland fought against this decision because it's a short term win, but potentially a massive long term loss.
• bdjsiqoocwk 2y ago
  It seems the zeitgeist has changed. When I first started using HN 5+ years ago, whenever you'd see a similar new, Americans and jump in and claim that this is just the lazy Europeans extorting the poor American companies. The reaction is very different these days.
• skc 2y ago
  Pocket change
• BiteCode_dev 2y ago
  Well, you gotta balance all that tax evasion with something.
• dmitrygr 2y ago
  This means that every company now needs a lawyer who understands the Treaty of Lisbon! Just in case some EU country tells them to do X, they now need to know if said country can actually say so! How is this a good thing?
  • hirako2000 2y ago
    Nothing new there, companies better have lawyers to enter new markets the size of countries.
• faramarz 2y ago
  Nice of them to announce it the day after a major launch. Barely any price action
• mvanbaak 2y ago
  As a eu citizen, what is the impact of this to me? Will this money be used for us? Nope. Some club of politicians will have a nice bonus, FAANG will be more aggressive against the EU. Look, if rules are broken ppl will have to be held responsible. But thats not entirey clear in this case. Thanks again EU
• baxuz 2y ago
  Isn't Ireland now effectively getting the penalty funds that their taxation malpractices caused in the first place?
• K3V1N_FLYNN 2y ago
  Eventually Apple will pull out of Europe and I’ll be sitting back laughing my ass off.
  • Zuiii 2y ago
    I hope so too. Maybe if apple and google finally pull out, the EU will be forced to innovate again. I'm sick of only having two shades of poo to pick from.
    • xvector 2y ago
      EU regulations make it a nightmare to innovate there. While millions of people cheer on "sticking it to big tech," they don't notice how the EU has become a barren wasteland of technological innovation for the past two decades. The only way to force the EU to innovate is for US tech to pull out entirely, thus disabling vast swaths of technological infrastructure and product the EU relies on and takes for granted. The absence of this technology will force the EU to recognize its importance, and thus the importance of crafting a regulatory environment that enables such benefits to come about. Without the fundamental recognition of the value of technology - and without this recognition happening at the level of the citizenry - the EU will continue to technologically stagnate while passing more and more regulations designed to rent-seek from the US.
    • K3V1N_FLYNN 2y ago
      If Apple leaves, you only have one choice. Then you’ll know what a monopoly really is. There used to be a saying, if you can’t beat them, join them. The EU seems to have modified to read, if you can’t beat them, hammer them with legislation until you can.
      • Zuiii 2y ago
        If both google and apple pull out, who will be your monopolist? And what makes you think that they won't also get hammered with legislation? And even if we assumed that this would be the case, maybe suffering under a "real monopoly" is _exactly_ what the EU needs to push them out of their local maxima. I hope they continue to hammer the ever living shit out of every company that abuses its position to exploit people and deny them their rights. Abusing copyright to prevent people from fixing their own property? Screw every single one of them.
• nodamage 2y ago
  An important point that seems to have been missed by most of the comments: the reason Apple lost this case is not because of the profit shifting scheme itself, but rather than they did not set up the scheme correctly: > ASI's 2014 structure was an adaptation of a Double Irish scheme, an Irish IP–based BEPS tool used by many US multinationals. Apple did not follow the traditional Double Irish structure of using two separate Irish companies. Instead, Apple used two separate "branches" inside one single company, namely ASI.[34] It is this "branch structure" the EU Commission alleged was illegal State aid, as it was not offered to other multinationals in Ireland, which had used the traditional "two separate companies" version of the Double Irish BEPS tool. Under the Double Irish structure, one Irish subsidiary (IRL1) is an Irish registered company selling products to non–US locations from Ireland. The other Irish subsidiary (IRL2) is "registered" in Ireland, but "managed and controlled" from a tax haven such as Bermuda. The Irish tax code considers IRL2 a Bermuda company (used the "managed and controlled" test), but the US tax code considers IRL2 an Irish company (uses the registration test). Neither taxes it. Apple's subsidiary, ASI, behaved like it was IRL2, it was "managed and controlled" via ASI Board meetings in Bermuda, so Irish Revenue did not tax it. But ASI also did all the functions of IRL1, making circa €110.8 billion[6] of profits from non–US sales. The EU Commission contest IRL1's actions made ASI Irish, and the functions of IRL1 over-rode the Bermuda Board meetings in deciding the "managed and controlled" test. The commission had not brought any cases against US multinationals using the standard double two separate companies Irish BEPS tool. (https://en.wikipedia.org/wiki/Apple%27s_EU_tax_dispute https://en.wikipedia.org/wiki/Apple%27s_EU_tax_dispute) In other words if they had actually set up two separate Irish companies instead of just using two separate branches of a single Irish company, their tax scheme would have been fully legal and not considered state aid. (Since many other companies availed themselves of such a scheme.)
  • yunohn 2y ago
    What a timeline we live in where the EU is basically telling Apple that they weren’t smart enough with their tax evasion - “see if you did it like other FAANG you could’ve gotten away with it!”
    • toyg 2y ago
• chubs 2y ago
  Can Apple simply exit Ireland effective immediately and claim they paid their taxes, and do not wish to be around for this new rule?
  • a2128 2y ago
    Since the ruling has already been made I doubt they can avoid it other than by exiting the EU market altogether. The result of exiting EU would be Apple's competitors becoming more dominant, decreased sales from loss of an entire market, and reputational damage from quitting over a petty tax dispute.
• floppiplopp 2y ago
  Nice.
• quattrofan 2y ago
  [dead]
• lofaszvanitt 2y ago
  This is how you tax these companies. They f around, they hand over part of their profit. Good.