Apple ordered to pay $15 billion USD for tax evasion

[1prophet]

That pretty much sums up tax evasion and what is going on. Especially when tax rate in country A is 0.005% and tax rate in country B is 23%.


Now I don't fault any corporation for doing what they can to garner profit to the best of their abilities. But shady shit like this makes me shake my head.

Corporations don't do that, human beings in corporations do that, they just use the corporate structure to not only insulate themselves against various liabilities but also their conscious against the very same type of systematic abuse they have no problem pointing the finger at others like the "welfare queen" or the individual who tries to hide their money in an overseas account.

When you believe profit is the only thing that matters and nothing else does, anything could be justified including slavery and other human rights abuses as long as you have a legal structure (the corporation) that allows you to insulate your conscious against decisions that allow such things..

 

[Exterous]

EU is going after other companies too, and decision is expected soon, probably a similar one.

According to their press release they only have two other investigations underway - both in Luxembourg:

The Commission still has two in-depth state aid investigations under way - into the tax treatment of Amazon and McDonald's in Luxembourg.

http://europa.eu/rapid/press-release_STATEMENT-16-2926_en.htm

I am sorry for Apple that EU didn't recognize that their "head office" with no employees is actually responsible for creating most of the value of the products sold in Europe. Maybe they should have come up with better bullshit. I am sure Tim Cook is working on it.

So apparently its still ok for Dell, Microsoft and Google to do the same thing (and I am sure dozens more). The more I think about this the more I think it shows more cracks in the EU. The EU Commission is going after a handful of corporations across several countries because it can't keep countries toeing the line they want them to toe. I suspect these countries might resent this sudden change given that many of these laws have been on the books for decades. Meanwhile the EU doesn't appear to have the resources to force corporate adherence where it (or at least some of it) wants to either. I think this commission was formed in 2003 so it only took 13 years to single out 4 companies. Apple's investigation took 2 years. What companies have learned from this is that they can enjoy low legal tax status for a long time before, maybe, being forced to pay a small fine.

As for Tim Cook it wouldn't surprise me if he were looking elsewhere for a haven. I do wonder if there is a new popular tax haven that companies are flocking too. If so, the EU may see almost no new tax revenue and Ireland's economy may take a hit

Another thing that gets my goat is this idea that Apple made a deal with the Irish government, then when Ireland became an EU member, Apple honestly didn't think that it might affect their deal? A multi-billion dollar corporation attempting to hide their earnings honestly didn't consider that? No sensible person could possibly consider this to be a plausible scenario.

What? Ireland joined what became the EU in 1973. Apple wasn't founded until 1976. Absurdly low stateless taxing goes back at least as far as the early 90s. Even if we ignore that it took 25 years for this to be an issue it's probably worked out pretty well for Apple financially.

 

[mikeymikec]

What? Ireland joined what became the EU in 1973. Apple wasn't founded until 1976. Absurdly low stateless taxing goes back at least as far as the early 90s. Even if we ignore that it took 25 years for this to be an issue it's probably worked out pretty well for Apple financially.

My mistake, I should have referred to the financial union, which was rather more recent (1999 I believe). The EU has gone through a fair few major changes over the years.

So apparently its still ok for Dell, Microsoft and Google to do the same thing (and I am sure dozens more).

Has anyone actually said this or even implied it?

 

[Fanatical Meat]

I have a good way via legislative means to prevent such abuses: lower the corporate tax rates.

Dude they're paying one half a Penney per dollar. No tax reform is ever going to get it that low. May as well say no taxes on businesses.

 

[senseamp]

So apparently its still ok for Dell, Microsoft and Google to do the same thing (and I am sure dozens more).

Who said it was OK? There are EU investigations going on into illegal subsidies for other companies. Apple was just the first ruling.

 

[glenn1]

Dude they're paying one half a Penney per dollar. No tax reform is ever going to get it that low. May as well say no taxes on businesses.

As opposed to the zero Ireland would have gotten otherwise? By allowing Apple to incorporate there the government got a new revenue stream (even if it was only at a rate of 0.5% that's still better than nothing) and a few jobs. That doing so allowed Apple and others to avoid paying high taxes elsewhere because the laws in the U.S. and elsewhere allow them isn't on Ireland. A parallel would be like one of those small towns where the city makes most of its revenue on speeding tickets from out-of-towners passing through. Ireland is like one of those entrepreneurs who hold up a sign saying "speed trap ahead, donations kindly accepted." Which party are you going to be more mad at, the town trying to wring money out of people or the person trying to make a buck by saving others from getting expensive tickets?

In this case the EU is acting like the corrupt politician passing a law prohibiting warning people of speed traps in order for Boss Hogg in Podunksville to continue fleecing motorists.

 

[Phynaz]

he explained it to you. Fucking dumb.

Thanks for your insightful contribution. I don't think I've ever seen you post an actual original thought. Typical Lefty swallowing and then regurgitating whatever is fed to him.

 

[pcgeek11]

Fuck Apple. They should pay up their just income taxes and a huge fine for avoidance. Ireland should also be held accountable for aiding and abetting.

 

[mikeymikec]

As opposed to the zero Ireland would have gotten otherwise?

Wow, that's some insight you're implying there, both of Apple's bargaining position at the time and of Ireland's.

Logically, if Ireland had literally no leverage to bargain with, there wouldn't be any reason for Apple to approach them with such a deal. Logically, Apple looked for a country that was reasonably stable, with a reasonably decent level of public services, and with a low tax rate for corporations.

In this case the EU is acting like the corrupt politician passing a law prohibiting warning people of speed traps in order for Boss Hogg in Podunksville to continue fleecing motorists.

You might actually want to read up on even the beermat summary of the law in question before acting like you know what you're talking about. EU states (Ireland is one) agree not to give selective tax breaks to companies in their jurisdiction. The EU are insisting that Apple adheres to EU law and pays the usual amount a company can expect to pay in Ireland for corporation tax.

This isn't even vaguely like "prohibiting warning people of speed traps".

 

[senseamp]

Apple is the one that wanted to book those profits in Ireland instead of the United States to dodge US taxes, even though value was created in the US.
But now it's saying, no no, these are American profits, not subject to Irish taxes. Apple needs to make up its mind and own up to their decisions. Non-existent legal entities in the sky where profits could magically be parked indefinitely without booking them in any country was always too good to be true, and now it caught up to them.

 

[senseamp]

Funny thing is Paul Ryan is trying to peddle the usual "Job Creator" BS that he peddles here in Europe.
http://www.nytimes.com/2016/09/01/b...les-tax-dodge-today-by-its-tax-bill.html?_r=0

“This decision is awful,” Mr. Ryan said in a statement. “Slamming a company with a giant tax bill — years after the fact — sends exactly the wrong message to job creators on both sides of the Atlantic.”

 

[senseamp]

As opposed to the zero Ireland would have gotten otherwise? By allowing Apple to incorporate there the government got a new revenue stream (even if it was only at a rate of 0.5% that's still better than nothing) and a few jobs. That doing so allowed Apple and others to avoid paying high taxes elsewhere because the laws in the U.S. and elsewhere allow them isn't on Ireland. A parallel would be like one of those small towns where the city makes most of its revenue on speeding tickets from out-of-towners passing through. Ireland is like one of those entrepreneurs who hold up a sign saying "speed trap ahead, donations kindly accepted." Which party are you going to be more mad at, the town trying to wring money out of people or the person trying to make a buck by saving others from getting expensive tickets? In this case the EU is acting like the corrupt politician passing a law prohibiting warning people of speed traps in order for Boss Hogg in Podunksville to continue fleecing motorists.

How about before railing on the EU, you try telling the US IRS that all your gross income is actually not yours, but instead belongs to a "head office" that exist only on paper and has no country. Report to us how that works out for you.

 

[Sonikku]

This is a problem but it is hardly limited to Apple. The tax burden will continue it's shift away from big businesses onto smaller ones. Pound for pound the more money you have, the less you pay.

 

[senseamp]

This is a problem but it is hardly limited to Apple. The tax burden will continue it's shift away from big businesses onto smaller ones. Pound for pound the more money you have, the less you pay.

That's exactly why it's an issue for competition authorities to address. The big companies use their size and leverage to extract tax deals that aren't available to their smaller would be competitors.
We should be doing this in the US too, not criticizing the EU.
Jack Lew and US politicians are making a complete fools of themselves, because they were going to offer a sweetheart deal to Apple to bring that money to the US, but now it can't be less than 12.5%, otherwise Apple will just deduct their new EU imposed Irish taxes against it, it will bring no tax revenue to the US, and just make American political establishment look like morons who have been had.

 

[Phynaz]

This is a problem but it is hardly limited to Apple. The tax burden will continue it's shift away from big businesses onto smaller ones. Pound for pound the more money you have, the less you pay.

Obama has had 7 years to fix this.

 

[Fanatical Meat]

Obama has had 7 years to fix this.

So has the House and Senate

 

[Exterous]

Has anyone actually said this or even implied it?

Who said it was OK?

Ireland actively continues to say its ok and is appealing the EUs decision. The EU has not ruled or stated its not allowed for any company except Apple.

There are EU investigations going on into illegal subsidies for other companies. Apple was just the first ruling.

In terms of Ireland its the first although the EU has levied fines for similar practices against Starbucks in the Netherlands. I doubt the 2-3 on-going, multi-year investigations the EU can apparently handle is going to scare away companies from doing this in the EU for as long as countries like Netherlands, Belgium, Ireland, Switzerland, Lichtenstein, and Luxembourg (and probably more) continue to allow this under their laws. Although if it does I'm pretty sure companies will just more heavily use their Cayman, Panama, Costa Rican, Barbados, Singapore etc tax havens.

 

[agent00f]

Thanks for your insightful contribution. I don't think I've ever seen you post an actual original thought. Typical Lefty swallowing and then regurgitating whatever is fed to him.

No, it was literally explained how it's illegal. Unfortunately you're not in the business of understanding explanations so that was futile.

Obama has had 7 years to fix this.

Obama is a centrist. That means he sees eye to eye with you guys on some things. Blaming someone for being kind of like you is hella dumb.

 

[Phynaz]

I wasn't blaming Obama.

 

[monkeydelmagico]

All it will teach them is, maybe, to go elsewhere for avoidance. I don't think its possible to shut down all the potential tax havens or tax structures in the world. Personally I think there is a rate below the current 35% tax on repatriated money that would make schemes like this not worth the effort and bring some of the $2.6 trillion in cash reserves held overseas back home

Looks like that is exactly what is going to happen: http://www.cnbc.com/2016/09/01/appl...iate-billions-of-dollars-to-us-next-year.html

 

[Sonikku]

That's exactly why it's an issue for competition authorities to address. The big companies use their size and leverage to extract tax deals that aren't available to their smaller would be competitors.
We should be doing this in the US too, not criticizing the EU.
Jack Lew and US politicians are making a complete fools of themselves, because they were going to offer a sweetheart deal to Apple to bring that money to the US, but now it can't be less than 12.5%, otherwise Apple will just deduct their new EU imposed Irish taxes against it, it will bring no tax revenue to the US, and just make American political establishment look like morons who have been had.

Doesn't matter though. Those same big businesses gaming the tax code have also bought out American government. Usually both sides to government, ensuring favorable terms regardless of how the chips land. When both parties are morons and both are towing the corporate line and Americans won't vote 3rd party this will continue. Regardless of any perception of foolishness. Vote for the moron of your choice, America.

 

[Joepublic2]

I think this is a win morally, and they should be fined if they violated the letter of the law wrt EU economic agreements. Punishing anybody, even huge corporations, for violating the spirit of the law is a really bad precedent, however. If the laws have loopholes, close them; don't selectively apply them on an individual basis.

 

[glenn1]

I think this is a win morally, and they should be fined if they violated the letter of the law wrt EU economic agreements. Punishing anybody, even huge corporations, for violating the spirit of the law is a really bad precedent, however. If the laws have loopholes, close them; don't selectively apply them on an individual basis.

They didn't violate the spirit or word of the law. Apple obeyed Irish tax laws and paid the tax due. This is more akin to a store clerk selling a couple grand worth of outfits at the boutique over the course of years. Then from out of the blue the EU comes and invalidates the sales and makes you return all the money on the basis that the woman is in bankruptcy and needs to get approval from the judge to spend more than $50. It's not the store's duty to ensure their customers are obeying some legal agreement they reached with the government, it's the stores' duty to comply with the laws and duties that apply to the store.

 

[HumblePie]

They didn't violate the spirit or word of the law. Apple obeyed Irish tax laws and paid the tax due. This is more akin to a store clerk selling a couple grand worth of outfits at the boutique over the course of years. Then from out of the blue the EU comes and invalidates the sales and makes you return all the money on the basis that the woman is in bankruptcy and needs to get approval from the judge to spend more than $50. It's not the store's duty to ensure their customers are obeying some legal agreement they reached with the government, it's the stores' duty to comply with the laws and duties that apply to the store.

Not really. This is not a caveat emptor kind of situation. Ignorance of the law doesn't excuse you of it. The law is that they were suppose to be paying 12.5%. Even if Apple tries to play stupid that doesn't mean they aren't obligated to still pay it. When a situation looks too good to be true it probably is. They should have realized the tax break they were getting was way too much even if they are trying to play the injured dumb innocents. But being the company they are and that many other big companies do the same thing, I have a hard time believing they were unaware of the situation all these years.

 

[senseamp]

If Apple's position is that EU rules don't apply in EU member Ireland, they can try it, but I don't think they will work.