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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 wor

by 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"
    - pyrale 2y ago
      > I think you underestimate the damage of "we cannot trust the actual government to tell us what we can and cannot do" I wonder how these companies manage not to run afoul of US FCPA.
    - yunohn 2y ago
      Dude, seriously? You’re acting like Apple was clueless here. This entire controversy is about Ireland and Apple colluding for over a decade to avoid paying corporate taxes anywhere else in the EU. Nobody involved was ignorant of the potential illegality, rather that was deliberately the point.
    - toyg 2y ago
      > any company in existence now needs a lawyer who understands the Treaty of Lisbon! Hyperbole makes you look hysteric. The reality is that every other company is doing just fine, paying the tax they owe. The only companies who have to worry are shady ones like Apple (abusing tax-havens since the '80s, with Braeburn etc): it's now established that secret agreements with cosy governments will not be tolerated in the EU, as it should be.
      - Silhouette 2y ago
        Do you really believe Apple-Ireland is the only cosy tax-based incentive that any EU member state has offered to any international company to invest and operate locally in the past 30 years? What's next? All the member states that offered attractive VAT rates when the regime was different years ago and doing so was advantageous retrospectively get reset to some baseline rate around the bloc's average and every company that ever paid VAT at lower rates in those member states gets a bill?
        noirbot 2y ago
        It's also literally not the only one that got in trouble today. Google's deal with Ireland also got smacked down.
        toyg 2y ago
  - rowanG077 2y ago
    Laws are also often intentionally written in such a way to be both hard to understand and ambiguous. Such rarely exercised laws are really only made manifest once tested by a court of law. It's basically impossible to protect yourself via the word of law. Because when the rubber hits the road the judge can interpret whatever they want. Unless there is precedent even the best lawyers are just guessing.
  - Silhouette 2y ago
    Ignorance of the law is not an excuse. That argument is quite a stretch when the EU tends to pass relatively ambiguous legislation and leave interpretation relatively open compared to for example the legal framework in the US, when it was not some random law firm but literally the relevant national government that gave Apple the OK, and when that situation was widely known and apparently accepted for about 30 years before the EU intervened. I think the EU will pay a high price for actions like this. It is retrospectively moving the goalposts decades after the fact and trying to shift billions in funds when ironically neither the company paying the taxes nor the member state government apparently compelled now to collect them want that situation. You can't play games like that and remain a credible environment for investment and growth. This particular action is specific to Ireland but by the nature of the EU its willingness and ability to take such an action in one member state taints all other member states as well. And without constitutional change to the EU itself there will never now be anything that any member state can ever do to remove that stain. Businesses now can't trust that any incentives they are offered to invest and grow in any EU member state won't get reversed further down the line no matter what any government of any member state says. It's hard to overstate how devastating that reality could become to member states trying to attract investment and grow their economies.
    - noirbot 2y ago
      The other thing that worries me here is the EU's seeming willingness to both not intervene quickly and not provide ways for companies to know for sure that they're on the right side of EU laws until they do or don't get sued.
      - Silhouette 2y ago
        Creating an ambiguous business environment is unfortunately a recurring pattern with the EU. A few years ago we had some fierce debates on HN about EU measures like the GDPR. Some claimed the regulations were excellent and compliance was easy if you weren't doing anything wrong. Some were more cautious and thought the length and frequent ambiguity of the regulations meant it couldn't be that simple. The strident defenders of the GDPR as lightweight regulation that should cause no significant costs or problems for honest businesses might like to read Mario Draghi's assessment of it from his report this week.
dotancohen 2y ago
In the case of conflicting laws, who prevails? If the Irish pass a law that Apple can not pay certain taxes, does that not override EU law? Usually in cascading situations, the more local entity wins, n
- ko27 2y ago
  If there is a legal conflict, EU law trumps all, the same way federal law trumps local law in US. The highest court is always an EU institution. EU countries give up part of their sovereignty in specific legal areas, like market competition regulations. They can always leave if they want.
  - hnbad 2y ago
    This depends, though. The EU does not have laws covering everything that national or local law might cover in its member states. In many cases the EU court of law is more like the US Supreme Court in that it is more about establishing whether a given legal decision is compatible with the basic law (e.g. human rights). It's more about setting the boundaries within which member states can make their own laws. So national law might say "X is illegal" and EU law might say "nations can say X is illegal" (or that they can't).
- alibarber 2y ago
  Ireland cannot do that. That’s literally the whole point of the EU (or specifically a single market) Effectively - your hypothetical proposed ‘apple law’ would, at some point in the Irish law passing process, be found to be incompatible with their commitments to being in the EU, and I assume it would be then an unconstitutional law. The price of admittance to the EU is basically having this process and constitution. Now - they could go ahead and do it anyway in which case the enforcement from the EU could range from anything to an angry letter to some large monetary penalty - as is the case with Hungary currently being withheld some funds.
  - noirbot 2y ago
    I mean, isn't that exactly the case here though? Ireland's law said they could do this. The EU says that's wrong, and Ireland is seemingly getting a reward for doing something illegal that the EU didn't decide was illegal for almost 30 years? Again, not disputing that this is legally accurate to how things work, but that definitely strikes me as an environment that a lot of businesses would find hard to work with. Other smaller startups I've worked with had Irish branches because it was a good way to hire devs and governments gave us some incentives. Finding out, potentially decades later, that the Irish government had screwed us over would be a lot more catastrophic than this fine will be to Apple.
kergonath 2y ago
> Apple's ignorance of EU law is not an excuse, this doesn't work for individuals, why should it work for big multinational companies? It’s worse than that. What was being ignored was Irish law. The EU just said that this law should be applied equally without the Irish government cutting special deals. > Apple's decision to put their trust completely in Ireland officials and sidestep the EU is their own mistake. Indeed. But it is not a terrible mistake: you should be able to take a tax administration at their word, even though you should also know what you have to pay in taxes. They are not really being punished, they just need to pay what they owe, which I think is fair.

by ko27 2y ago

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"
  - pyrale 2y ago
    > I think you underestimate the damage of "we cannot trust the actual government to tell us what we can and cannot do" I wonder how these companies manage not to run afoul of US FCPA.
  - yunohn 2y ago
    Dude, seriously? You’re acting like Apple was clueless here. This entire controversy is about Ireland and Apple colluding for over a decade to avoid paying corporate taxes anywhere else in the EU. Nobody involved was ignorant of the potential illegality, rather that was deliberately the point.
  - toyg 2y ago
    > any company in existence now needs a lawyer who understands the Treaty of Lisbon! Hyperbole makes you look hysteric. The reality is that every other company is doing just fine, paying the tax they owe. The only companies who have to worry are shady ones like Apple (abusing tax-havens since the '80s, with Braeburn etc): it's now established that secret agreements with cosy governments will not be tolerated in the EU, as it should be.
    - Silhouette 2y ago
      Do you really believe Apple-Ireland is the only cosy tax-based incentive that any EU member state has offered to any international company to invest and operate locally in the past 30 years? What's next? All the member states that offered attractive VAT rates when the regime was different years ago and doing so was advantageous retrospectively get reset to some baseline rate around the bloc's average and every company that ever paid VAT at lower rates in those member states gets a bill?
      - noirbot 2y ago
        It's also literally not the only one that got in trouble today. Google's deal with Ireland also got smacked down.
      - toyg 2y ago
- rowanG077 2y ago
  Laws are also often intentionally written in such a way to be both hard to understand and ambiguous. Such rarely exercised laws are really only made manifest once tested by a court of law. It's basically impossible to protect yourself via the word of law. Because when the rubber hits the road the judge can interpret whatever they want. Unless there is precedent even the best lawyers are just guessing.
- Silhouette 2y ago
  Ignorance of the law is not an excuse. That argument is quite a stretch when the EU tends to pass relatively ambiguous legislation and leave interpretation relatively open compared to for example the legal framework in the US, when it was not some random law firm but literally the relevant national government that gave Apple the OK, and when that situation was widely known and apparently accepted for about 30 years before the EU intervened. I think the EU will pay a high price for actions like this. It is retrospectively moving the goalposts decades after the fact and trying to shift billions in funds when ironically neither the company paying the taxes nor the member state government apparently compelled now to collect them want that situation. You can't play games like that and remain a credible environment for investment and growth. This particular action is specific to Ireland but by the nature of the EU its willingness and ability to take such an action in one member state taints all other member states as well. And without constitutional change to the EU itself there will never now be anything that any member state can ever do to remove that stain. Businesses now can't trust that any incentives they are offered to invest and grow in any EU member state won't get reversed further down the line no matter what any government of any member state says. It's hard to overstate how devastating that reality could become to member states trying to attract investment and grow their economies.
  - noirbot 2y ago
    The other thing that worries me here is the EU's seeming willingness to both not intervene quickly and not provide ways for companies to know for sure that they're on the right side of EU laws until they do or don't get sued.
    - Silhouette 2y ago
      Creating an ambiguous business environment is unfortunately a recurring pattern with the EU. A few years ago we had some fierce debates on HN about EU measures like the GDPR. Some claimed the regulations were excellent and compliance was easy if you weren't doing anything wrong. Some were more cautious and thought the length and frequent ambiguity of the regulations meant it couldn't be that simple. The strident defenders of the GDPR as lightweight regulation that should cause no significant costs or problems for honest businesses might like to read Mario Draghi's assessment of it from his report this week.

dotancohen 2y ago

In the case of conflicting laws, who prevails? If the Irish pass a law that Apple can not pay certain taxes, does that not override EU law? Usually in cascading situations, the more local entity wins, n

ko27 2y ago
If there is a legal conflict, EU law trumps all, the same way federal law trumps local law in US. The highest court is always an EU institution. EU countries give up part of their sovereignty in specific legal areas, like market competition regulations. They can always leave if they want.
- hnbad 2y ago
  This depends, though. The EU does not have laws covering everything that national or local law might cover in its member states. In many cases the EU court of law is more like the US Supreme Court in that it is more about establishing whether a given legal decision is compatible with the basic law (e.g. human rights). It's more about setting the boundaries within which member states can make their own laws. So national law might say "X is illegal" and EU law might say "nations can say X is illegal" (or that they can't).
alibarber 2y ago
Ireland cannot do that. That’s literally the whole point of the EU (or specifically a single market) Effectively - your hypothetical proposed ‘apple law’ would, at some point in the Irish law passing process, be found to be incompatible with their commitments to being in the EU, and I assume it would be then an unconstitutional law. The price of admittance to the EU is basically having this process and constitution. Now - they could go ahead and do it anyway in which case the enforcement from the EU could range from anything to an angry letter to some large monetary penalty - as is the case with Hungary currently being withheld some funds.
- noirbot 2y ago
  I mean, isn't that exactly the case here though? Ireland's law said they could do this. The EU says that's wrong, and Ireland is seemingly getting a reward for doing something illegal that the EU didn't decide was illegal for almost 30 years? Again, not disputing that this is legally accurate to how things work, but that definitely strikes me as an environment that a lot of businesses would find hard to work with. Other smaller startups I've worked with had Irish branches because it was a good way to hire devs and governments gave us some incentives. Finding out, potentially decades later, that the Irish government had screwed us over would be a lot more catastrophic than this fine will be to Apple.

kergonath 2y ago

> Apple's ignorance of EU law is not an excuse, this doesn't work for individuals, why should it work for big multinational companies? It’s worse than that. What was being ignored was Irish law. The EU just said that this law should be applied equally without the Irish government cutting special deals. > Apple's decision to put their trust completely in Ireland officials and sidestep the EU is their own mistake. Indeed. But it is not a terrible mistake: you should be able to take a tax administration at their word, even though you should also know what you have to pay in taxes. They are not really being punished, they just need to pay what they owe, which I think is fair.