U.S. Warns Apple Tax Probe in Europe Could Set 'Undesirable Precedent'

God forbid they pay taxes like the rest of us.

The EU has rules. Deal with it.

If you make billions abroad, you get taxed abroad. If you make billions at home, you get taxed at home.

In a reasonable manner - of course!

But a SUB-2% tax rate for one of the biggest, richest and most successful companies on the planet though is neither reasonable nor fair to your employees, who get taxed way beyond that.

The EU has rules. Deal with it.

Dear EU,
This is how we deal with it.
Love,
The U.K. #Brexit

Dear EU,
This is how we deal with it.
Love,
The U.K. #Brexit

Yes by running away doing nothing and taking the own economy down. Great resolution!

Can the EU force a European country on deciding how the taxes should be structured? Honest question.

Some sweetheart deals can supposedly go against EU rules. This is how the investigation is going.

The EU has punished more European companies than American ones.

Apple pays ireland taxes based on the laws on the books. Nothing wrong there. EU determines Ireland passed a tax law that is against the rule. Okay then, force Ireland to change their tax law. return to the beginning - Apple pays ireland taxes based on the laws on the books. This would all seem reasonable.

The only part that seems off to me is if EU says to apple that even though they paid per law, they are changing the law retroactively and now Apple owes back taxes and fines. That would be wrong IMO.

Apple pays ireland taxes based on the laws on the books. Nothing wrong there. EU determines Ireland passed a tax law that is against the rule. Okay then, force Ireland to change their tax law. return to the beginning - Apple pays ireland taxes based on the laws on the books. This would all seem reasonable.

The only part that seems off to me is if EU says to apple that even though they paid per law, they are changing the law retroactively and now Apple owes back taxes and fines. That would be wrong IMO.

No, that's not how it works nor is that actually what might happen.

The European Commission (EC) has no authority to create legislation; they only have the power to propose legislation which must be approved by the Council of the European Union and the European Parliament. What is happening here is the EC is investigating whether or not the Republic of Ireland, as a member of the EU (and therefore subject to European law), violated rules governing the exercise of state aid. Offering companies exclusive tax breaks under a special scheme can be illegal state aid depending on the circumstances. The rules are designed to prevent member states from distorting the market which can be harmful to the economy and to other companies. If the European Commission finds a member state in breach of state aid rules, EU law grants power to the European Commission to direct a member state in breach of state aid rules to recover the money it gave out (or the tax it waived). In the case of Apple, if the Republic of Ireland are found to be in breach of state aid rules, the EC can require the Irish government to recover the tax that Apple did not pay under the reduced tax rate that was illegal in the first place.

So hopefully you understand by now that no new laws are being created. If you have received state aid that was given to you unlawfully, then you have to pay it back. In the case of Apple, that would be the tax it should have paid. The laws governing state aid were in place well before the Republic of Ireland agreed with Apple that it can generate profits in the country at a reduced tax rate. So there is nothing "retrospective" that could not already have been known to both parties at the time the agreement was formed.

Maybe if the United States modernised its tax rules, perhaps we wouldn't be having this conversation. The reason many companies do not repatriate their cash back into the United States is because of the ridiculously high corporate tax rate. Would you accept up to a 35% cut to bring your income back home? No, you might opt to keep your money at a bank overseas. I'm not saying it's right what Apple are doing - they should pay more tax in the Republic of Ireland and bring a portion of their cash pile back to their home country, but comments from the U.S. Treasury pointing to the European Commission for attempting to address this problem and sending a message to other companies operating in the EU is not helpful. It can easily be misinterpreted as interfering in a matter of EU jurisdiction.

It's called "bait and switch."

When you switch right before attempting the sale, it's deception. When you do it 12 years later, it's thievery.


Whatever the legal technicalities may be, this is unethical. If the EU had really cared, they should have done something 12 years ago, not try to steal $8bn from them today.

If the tax deal Ireland proposed is against EU rules, it is an erroneous application of the law, so Apple receives a tax adjustment. Normal.

Yes and this interpretation is why this is a dangerous precedent to set. If a company is always at risk that they will owe back taxes because some politician decides to change the rule, companies will have a hard time estimating their cost of doing business. this will bring uncertainty and risk which means less investment as the horde cash to protect against these activities. Bad business all around.