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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 App

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.

tiffanyh 2y ago
That's exactly why I asked. If the government approached Apple, to offer them a special (specific to Apple) tax deal in exchange for X ... why is Apple now being held accountable for Ireland doings.
- ko27 2y ago
  Because in this area, EU has rule of law, not Ireland.
  - com 2y ago
    I don’t think that rule of law means what you think it does.
  - projektfu 2y ago
    More helpfully, you probably mean EU law supersedes Irish law in this area.
- pyrale 2y ago
  Because accepting a corruption bargain is as illegal as offering it.
  - tiffanyh 2y ago
    "Corruption" is a strong word here. Tax Abatements are a long, well understood practice that's been leveraged by city/state/federal governments for decades to incentivize desired outcomes. Look at Electric Vehicles (EV's) Both California and Federal government were giving tax incentives for individuals who purchase an EV. This tax abatement was used to incentivize the adoption of EV's. Is that "corruption? Absolutely not.
    - Sakos 2y ago
      ... Isn't it?
    - pyrale 2y ago
      Apple and Ireland maintain that is no record of "a deal", yet Apple paid 1% of what the law says they owed. The only beneficiary of that favourable situation is Apple. Let's be honest, if this happened in any "less reputable" jurisdiction, Apple would definitely be under FCPA scrutiny. > Tax Abatements are a long, well understood practice Yeah, the kind of "tax abatement" that is available only to a select few.
dmurray 2y ago
> 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. Yes, there's a widespread view in Ireland that this was the best possible outcome: be seen to fight tooth and nail to prevent collecting the taxes, but get them anyway. > 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. I'm not so sure of this, though. The companies aren't fools and have better paid lawyers than the countries, so they won't enter these deals unless they rate their chances of getting away with it.
- noirbot 2y ago
  Sure, I'm not saying this is going to be a likely fraud, but there's much more subtly illegal ways to offer stuff that may be worth the risk for a company and then the government then lobbies via backchannels for the EU to find it illegal.
- buildbot 2y ago
  An interest free loan for years for 13 billion isn’t too bad!
  - hervature 2y ago
    I haven't read this specific case but normally "back taxes" refers to the taxes, interest, and fees that are owed.
    - awad 2y ago
      I would guess that Apple's ability to get a return on its cash are likely to exceed the total of taxes, interest, and fees.
BlackFly 2y ago
Sure, Ireland did wrong by insinuating to Apple that they could have special treatment when in fact EU law prohibits it, but Apple failed to pay the prevailing tax rates which can be demanded long after the fact. Ireland has sovereign immunity from tort in this case. They could legislate to waive their immunity for tax assurances which would create an interesting constitutional issue in the EU.
- toyg 2y ago
  EU law supercedes national law. Ireland can legislate as much as they want, but if they ignore ECJ judgements stating that their laws are incompatible with EU legislation, they will be fined.
  - BlackFly 2y ago
    Yes, potentially, but my understanding by following this case and others is that the EU has no legislation on taxes other than non-discrimination. So there is no EU law to supercede Irish law.
ko27 2y ago
It's simple, EU law says Apple had to pay taxes at that time. Apple's ignorance of EU law is not an excuse, this doesn't work for individuals, why should it work for big multinational companies? Ireland doesn't have the power alone to overturn these kinds of laws, unless, of course, they decide to leave EU. Apple's decision to put their trust completely in Ireland officials and sidestep the EU is their own mistake. Reminds me of when Trump tried to arrange a trade deal with Germany without EU, which was impossible.
- dmitrygr 2y ago
  > Apple's ignorance of EU law is not an excuse > Ireland doesn't have the power alone to overturn these kinds of laws How was apple to know what ireland could and could not do? Why should they have to? Irish government said to apple that the rules are as such. The precedent this sets is that companies should not trust governments' words, instead each company should somehow interpret the laws themselves, each (surely) in their own way. Are we sure we want to set this precedent?
  - noitpmeder 2y ago
    Presumably these laws are published publicly, and apple has more an enough resources to hire enough lawyers to ensure they are in compliance. Ignorance of the law is not an excuse.
    - dmitrygr 2y ago
      five accountants will produce six results from the same input based on the same laws, all of which the IRS will accept. Laws are not code. They are not unambiguous and noncontradictory. And forget apple! This means that any company in existence 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! I think you underestimate the damage of "we cannot trust the actual government to tell us what we can and cannot do"
      - 2y ago
marcosdumay 2y ago
If the government "offers" you a deal that you don't deserve, and you take it, that's a crime. It's pretty much everywhere. The government isn't a person that can make decisions autonomously.
pyrale 2y ago
> It seems like Ireland did the thing that's against the rules by offering the deal, not Apple? Well, Apple accepted the illegal deal, didn't they? > 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. There's also a perverse incentive for companies to defer paying taxes for 20 years. Apple isn't getting fined, they're just paying what they owe 20 years late. edit: apparently the years were 1991 to 1997, so that's about 30 years actually.
ensignavenger 2y ago
I read through the first part of the ruling to get a better idea of what happened. Apparently, Apple wrote to the Irish tax authorities, and said "this is how we plan to calculate our taxes" and the Irish tax authority said "okay, no problem, that works for us" and the EU commission investigated some years later, and said "wait, was that method of calculating taxes available to all Irish companies? We don't think so, so now Ireland has to collect taxes from all the way back many years." Ireland said "no bro, we're all good, they don't owe us anything", and Apple said "wait, we just did what we were told to do, and we already paid taxes on that income in the US instead of the EU, you can't retroactively change the rules" and the EU top court just said "Sorry, those tax rules go against EU law, and yes we can"
- nine_k 2y ago
  > you can't retroactively change rules ... yes we can Hence, fewer US companies will have significant production in the EU in general, and possibly Ireland in particular. Let's hope it will help native European industries flourish %)
  - hnbad 2y ago
    They didn't retroactively change the rules. They retroactively found a contract invalid. I'd file this under "play stupid games, win stupid prizes" as it sounds like Apple tried to talk Ireland into giving it special treatment that wasn't actually legally possible under EU law and the EU found out and told them they can't actually do that after Ireland agreed. If I get a tax agency worker to sign me a piece of paper that says I don't ever have to pay any taxes, I can insist that they said so all I want but I'll still owe the back taxes when someone finds out because that person had no authority to say I don't. Also capital flight doesn't actually work like that no matter how often people parrot it. Ireland is the European HQ for US tech companies because they need a European HQ to access the extremely lucrative market and Ireland is willing to go to great lengths (clearly including "agreeing to conditions they can't legally agree to) to attract them to go there in particular. If Ireland becomes less attractive that means they will be more likely to go elsewhere but their European HQ will still be in the EU/EEA because that's what it's for. This wasn't a case of Ireland competing for Europe where Ireland losing is a loss to all of the EU, it was Ireland competing against other EU countries.

tiffanyh 2y ago

That's exactly why I asked. If the government approached Apple, to offer them a special (specific to Apple) tax deal in exchange for X ... why is Apple now being held accountable for Ireland doings.

ko27 2y ago
Because in this area, EU has rule of law, not Ireland.
- com 2y ago
  I don’t think that rule of law means what you think it does.
- projektfu 2y ago
  More helpfully, you probably mean EU law supersedes Irish law in this area.
pyrale 2y ago
Because accepting a corruption bargain is as illegal as offering it.
- tiffanyh 2y ago
  "Corruption" is a strong word here. Tax Abatements are a long, well understood practice that's been leveraged by city/state/federal governments for decades to incentivize desired outcomes. Look at Electric Vehicles (EV's) Both California and Federal government were giving tax incentives for individuals who purchase an EV. This tax abatement was used to incentivize the adoption of EV's. Is that "corruption? Absolutely not.
  - Sakos 2y ago
    ... Isn't it?
  - pyrale 2y ago
    Apple and Ireland maintain that is no record of "a deal", yet Apple paid 1% of what the law says they owed. The only beneficiary of that favourable situation is Apple. Let's be honest, if this happened in any "less reputable" jurisdiction, Apple would definitely be under FCPA scrutiny. > Tax Abatements are a long, well understood practice Yeah, the kind of "tax abatement" that is available only to a select few.

dmurray 2y ago

> 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. Yes, there's a widespread view in Ireland that this was the best possible outcome: be seen to fight tooth and nail to prevent collecting the taxes, but get them anyway. > 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. I'm not so sure of this, though. The companies aren't fools and have better paid lawyers than the countries, so they won't enter these deals unless they rate their chances of getting away with it.

noirbot 2y ago
Sure, I'm not saying this is going to be a likely fraud, but there's much more subtly illegal ways to offer stuff that may be worth the risk for a company and then the government then lobbies via backchannels for the EU to find it illegal.
buildbot 2y ago
An interest free loan for years for 13 billion isn’t too bad!
- hervature 2y ago
  I haven't read this specific case but normally "back taxes" refers to the taxes, interest, and fees that are owed.
  - awad 2y ago
    I would guess that Apple's ability to get a return on its cash are likely to exceed the total of taxes, interest, and fees.

BlackFly 2y ago

Sure, Ireland did wrong by insinuating to Apple that they could have special treatment when in fact EU law prohibits it, but Apple failed to pay the prevailing tax rates which can be demanded long after the fact. Ireland has sovereign immunity from tort in this case. They could legislate to waive their immunity for tax assurances which would create an interesting constitutional issue in the EU.

toyg 2y ago
EU law supercedes national law. Ireland can legislate as much as they want, but if they ignore ECJ judgements stating that their laws are incompatible with EU legislation, they will be fined.
- BlackFly 2y ago
  Yes, potentially, but my understanding by following this case and others is that the EU has no legislation on taxes other than non-discrimination. So there is no EU law to supercede Irish law.

ko27 2y ago

It's simple, EU law says Apple had to pay taxes at that time. Apple's ignorance of EU law is not an excuse, this doesn't work for individuals, why should it work for big multinational companies? Ireland doesn't have the power alone to overturn these kinds of laws, unless, of course, they decide to leave EU. Apple's decision to put their trust completely in Ireland officials and sidestep the EU is their own mistake. Reminds me of when Trump tried to arrange a trade deal with Germany without EU, which was impossible.

dmitrygr 2y ago
> Apple's ignorance of EU law is not an excuse > Ireland doesn't have the power alone to overturn these kinds of laws How was apple to know what ireland could and could not do? Why should they have to? Irish government said to apple that the rules are as such. The precedent this sets is that companies should not trust governments' words, instead each company should somehow interpret the laws themselves, each (surely) in their own way. Are we sure we want to set this precedent?
- noitpmeder 2y ago
  Presumably these laws are published publicly, and apple has more an enough resources to hire enough lawyers to ensure they are in compliance. Ignorance of the law is not an excuse.
  - dmitrygr 2y ago
    five accountants will produce six results from the same input based on the same laws, all of which the IRS will accept. Laws are not code. They are not unambiguous and noncontradictory. And forget apple! This means that any company in existence 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! I think you underestimate the damage of "we cannot trust the actual government to tell us what we can and cannot do"
    - 2y ago

marcosdumay 2y ago

If the government "offers" you a deal that you don't deserve, and you take it, that's a crime. It's pretty much everywhere. The government isn't a person that can make decisions autonomously.

pyrale 2y ago

> It seems like Ireland did the thing that's against the rules by offering the deal, not Apple? Well, Apple accepted the illegal deal, didn't they? > 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. There's also a perverse incentive for companies to defer paying taxes for 20 years. Apple isn't getting fined, they're just paying what they owe 20 years late. edit: apparently the years were 1991 to 1997, so that's about 30 years actually.

ensignavenger 2y ago

I read through the first part of the ruling to get a better idea of what happened. Apparently, Apple wrote to the Irish tax authorities, and said "this is how we plan to calculate our taxes" and the Irish tax authority said "okay, no problem, that works for us" and the EU commission investigated some years later, and said "wait, was that method of calculating taxes available to all Irish companies? We don't think so, so now Ireland has to collect taxes from all the way back many years." Ireland said "no bro, we're all good, they don't owe us anything", and Apple said "wait, we just did what we were told to do, and we already paid taxes on that income in the US instead of the EU, you can't retroactively change the rules" and the EU top court just said "Sorry, those tax rules go against EU law, and yes we can"

nine_k 2y ago
> you can't retroactively change rules ... yes we can Hence, fewer US companies will have significant production in the EU in general, and possibly Ireland in particular. Let's hope it will help native European industries flourish %)
- hnbad 2y ago
  They didn't retroactively change the rules. They retroactively found a contract invalid. I'd file this under "play stupid games, win stupid prizes" as it sounds like Apple tried to talk Ireland into giving it special treatment that wasn't actually legally possible under EU law and the EU found out and told them they can't actually do that after Ireland agreed. If I get a tax agency worker to sign me a piece of paper that says I don't ever have to pay any taxes, I can insist that they said so all I want but I'll still owe the back taxes when someone finds out because that person had no authority to say I don't. Also capital flight doesn't actually work like that no matter how often people parrot it. Ireland is the European HQ for US tech companies because they need a European HQ to access the extremely lucrative market and Ireland is willing to go to great lengths (clearly including "agreeing to conditions they can't legally agree to) to attract them to go there in particular. If Ireland becomes less attractive that means they will be more likely to go elsewhere but their European HQ will still be in the EU/EEA because that's what it's for. This wasn't a case of Ireland competing for Europe where Ireland losing is a loss to all of the EU, it was Ireland competing against other EU countries.