Adverse Ruling Against Apple Expected in European Tax Probe

by

Apple-BondsThe European Commission is poised to hand down an adverse ruling against Apple next week following a three-year inquiry into the company's tax arrangements in Ireland, according to Financial Times.

Expectation of an adverse ruling gathered pace this week after the US Treasury issued a stinging attack on the commission’s investigation, saying the EU executive was becoming a “supranational tax authority” that threatened international agreements on tax reform.

The Brussels-based body, led by competition commissioner Margrethe Vestager, has been investigating whether Apple's alleged "sweetheart deal" with Ireland constitutes illegal state aid, which it determined based on its preliminary findings in 2014.

The commission has accused Apple of sheltering tens of billions of dollars by transferring revenue to multiple subsidiaries in Ireland, where it pays a significantly lower tax rate of around 2%, compared to the country's headline corporate tax rate of 12.5%.

An adverse ruling could result in Apple owing up to $21.2 billion in back taxes, although a previous study placed the figure around $8 billion, and some analysts believe the amount could be as low as $1 billion.

Apple is one of several large corporations accused of tax avoidance in Europe over the past three years, joining the likes of Starbucks, Fiat Chrysler, Amazon, Google, IKEA, and McDonald's. Starbucks in particular is currently appealing its case in Netherlands, where it was ordered to pay as much as 30 million euros in back taxes.

Apple CEO Tim Cook, who has insisted that his company fully complies with international tax law, said last month that it would appeal any unfavorable ruling in European courts. Apple has also said it is the largest taxpayer in the world.

Earlier this week, the U.S. Treasury department warned that an adverse ruling against Apple could "set an undesirable precedent." It also said the European Commission is becoming a "supranational tax authority," going beyond acceptable enforcement of competition and state aid law.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Top Rated Comments

(View all)
Avatar
53 months ago

The EU has to be very careful about applying taxes ex post facto. That would run counter to just about all accepted law, especially if they are targeting only a handful of companies.

They are not applying any law retroactively. If Apple has received illegal state aid from Ireland the company has to pay it back. Breaking the law needs to result in consequences.
Score: 14 Votes (Like | Disagree)
Avatar
53 months ago

I quite agree. It's also a bit disingenuous. The EU allowed one of its member states to strike this deal so Apple could avoid US taxes; now they turn around and say "Ireland, we want our piece too".

If they feel Ireland was wrong, they should allow Apple to go back and restate their prior-year finances according to whatever the EU seems to think is the proper reading of EU law. Or they should fine Ireland for the difference.

I'm not defending Apple here. But this seems a sleazy move by the EU to get in on the action. If anything, those Apple tax dodge savings should get repatriated to the US treasury, where they should have gone in the first place.
[doublepost=1472242493][/doublepost]


Note it's the US Treasury, which ostensibly is the entity that Apple "ripped off", that is protesting the EU action.

You have no idea what you are talking about. This is nothing to do with the US treasury being ripped off. This has everything to do with France, Germany, UK, and many other European Countries Financial authority being ripped off.

Apple books sales of its iPhones, computers software etc that is sold in these countries in Ireland. They are not the only ones doing it Amazon, Starbucks etc. are all up to the same game and they are all going to have to pay eventually. Ireland facilitates this because this brings jobs to Ireland but it is a Tax fraud pure and simple.

Apple chose to set up a structure that is dishonest and illegal. There is a separate issue that you may be confusing with this in that they do not repatriate profits to the US but keep them overseas thereby avoiding US corporate tax.

Ireland is a tiny market for Apple in Europe. The majority of their sales are in the big economies like Germany, France the UK, italy etc. By booking 100 percent of the sales in Ireland they make zero or little profit in these countries by diverting it to Ireland and paying 2 percent tax.

Apple is just greedy if they paid the correct tax due in every European country they would not have as many Billions sheltered overseas and the concerned countries would get more tax to build the roads and the hospitals and the rest of the infrastructure that the apple employees need and use every day.
Score: 10 Votes (Like | Disagree)
Avatar
53 months ago

Tim Cook is going to have to give his longevity bonus back! Or maybe they'll be forced to go down to 8 gigs for the base model of iPhones!

Since Apple makes all its money in Ireland they could save some expenses by closing their money-losing branch office in California.
Score: 8 Votes (Like | Disagree)
Avatar
53 months ago

I quite agree. It's also a bit disingenuous. The EU allowed one of its member states to strike this deal so Apple could avoid US taxes; now they turn around and say "Ireland, we want our piece too".

This is simply not true. Under EU state aid rules, a member country has to notify state aid, even if legal, to the commission. You imply that Ireland has notified this particular form of state aid to the commission, and that the commission has approved it/declared it to be legal. That's simply not true. The commission has never approved Ireland illegal state aid to Apple.

I hope that the commission comes down hard on Ireland and Apple. These forms of illegal corporate handouts are utter disgraceful.
Score: 7 Votes (Like | Disagree)
Avatar
53 months ago
This would set a dangerous precedent. Apple and all other companies do what they can to legally avoid tax.

Could you argue it's against the spirit of the law? Probably. But that doesn't stand up. Who would pay more than they have to, if it's legal at the same time?

If there's a legal tax loophole to stop paying as much, you're damn right you'd take it. Every company does and every person does. It's within the letter of the law. Apple are being targeted because they're ludicrously rich, and that's a slice of Apple pie people are happy to dig into.

Want to stop this kind of thing? Then change the tax rules for everybody, to avoid these sort of loopholes. As the old mantra goes: don't hate the player, hate the game.
Score: 5 Votes (Like | Disagree)
Avatar
53 months ago
Typical multinational corporation hide and seek. Your caught.....pay up sweetheart. Can't really blame Apple....they all do it.
Score: 4 Votes (Like | Disagree)

Top Stories

'iPhone 12 mini' Name Reappears in Leaked Apple iPhone 12 Case Stickers

Friday September 25, 2020 1:58 am PDT by
Earlier this week a proven leaker claimed that the iPhone 12 lineup would be named "iPhone 12 mini," "iPhone 12," "iPhone 12 Pro," and "iPhone 12 Pro Max," and today the same nomenclature has appeared again in a photo depicting alleged stickers from unreleased Silicone iPhone cases originating from Apple's international distribution center in Ireland. The photo shows three stickers with the...

New Images Leak of iPhone 12 Braided USB-C to Lightning Cable

Thursday September 24, 2020 2:37 am PDT by
Rumors suggest Apple's upcoming iPhone 12 models will ship with a new Lightning to USB-C cable that includes a braided fabric design. Images of the purported cables were leaked in July, and today leaker Mr White has shared new images that give us a closer look at what we might get included in the iPhone 12 box. The photos show a USB-C to Lightning cable with a clearly braided design rather...

New Version of Microsoft Office Coming Next Year That Won't Require a Subscription

Thursday September 24, 2020 1:53 am PDT by
Microsoft will next year offer a new perpetual release of Microsoft Office for Mac and Windows that doesn't require a subscription to use, according to the software giant (via Windows Central). "Microsoft Office will also see a new perpetual release for both Windows and Mac, in the second half of 2021," said Microsoft in a blog post announcing the next version of its Exchange server,...

Apple Releases iOS 14.0.1 With Fix for Bug That Resets Default Apps After Rebooting

Thursday September 24, 2020 10:12 am PDT by
Apple today released iOS 14.0.1, the first update to the iOS 14 operating system that was released on September 16. Today's update is a bug fix update addressing issues that weren't able to be fixed in the initial iOS 14 launch. The iOS 14.0.1 update is available on all eligible devices over-the-air in the Settings app. To access the new software, go to Settings > General > Software Update. ...

Apple's iPhone 12 Event Could Happen on October 13 Based on Rumors From Mobile Operators

Wednesday September 23, 2020 11:51 am PDT by
Apple's upcoming iPhone-centric event could perhaps be held on Tuesday, October 13, according to information shared with MacRumors by an employee at a UK cellular carrier. There's no way for us to confirm the dates at this point in time nor are we sure on the credibility of the source, but even without a rumor, Tuesday, October 13 is a good guess based on Apple's historic launch timelines, ...

Apple Releases macOS Catalina 10.15.7 With Fixes for WiFi Bug, 27-Inch iMac Graphics Issues

Thursday September 24, 2020 10:32 am PDT by
Apple today released macOS Catalina 10.15.7, the latest update to the macOS Catalina software. macOS Catalina 10.15.7 fixes several major bugs that Mac users have been experiencing, and it comes a month after the latest macOS Catalina release. The ‌‌‌macOS Catalina‌‌‌ 10.15.6 Supplemental Update can be downloaded from the Mac App Store using the Update feature in the System...

Apple Designs Custom Face Mask for Corporate and Retail Employees [Updated with Unboxing]

Wednesday September 9, 2020 11:13 am PDT by
Apple's design team has created a new kind of protective mask that's being distributed to retail and corporate employees, reports Bloomberg. The mask is called the Apple Face Mask and it was developed in-house in Cupertino by the Engineering and Industrial Design teams at Apple. Last week, an Apple employee sent MacRumors an image of the mask design, which can be seen up above. The Apple ...

Video Offers Closer Look at Apple Face Mask

Friday September 25, 2020 5:25 am PDT by
YouTube channel Unbox Therapy has today shared a new video giving a closer look at Apple's reusable face masks for corporate and retail employees. Apple's own face mask was designed by the company's Engineering and Industrial Design teams amid the global health crisis for corporate and retail employees, and the boxes include Apple's famous "Designed by Apple in California" text. The...

Top Stories: iOS 14 Feature Tour, 'iPhone 12 mini' Rumors, Apple Watch Band Controversy

Saturday September 26, 2020 6:00 am PDT by
Things started to calm down a bit this week following last week's rush of media event, Apple Watch and iPad launches, and the release of iOS 14 and other operating updates. But that doesn't mean there wasn't still a lot of news, from digging deeper into iOS 14 to more iPhone 12 rumors to the uproar over trying to exchange band sizes on the new Apple Watch. On top of all of that, we heard...

Interest in iOS 14 Home Screen Ideas Helps Pinterest Break Daily Download Record

Wednesday September 23, 2020 4:37 am PDT by
Apple's introduction of widgets on the Home Screen in iOS 14 has driven a surge in interest among users looking to customize their iPhone, and that has reportedly had a knock-on effect for Pinterest, whose iOS app has seen record downloads as users flock to its content seeking design inspiration. As reported by TechCrunch, App Store intelligence firm Apptopia was first to note the impact of ...