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

Cybbe Avatar
57 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)
nebo1ss Avatar
57 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)
MarkusL Avatar
57 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)
Cybbe Avatar
57 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)
keysofanxiety Avatar
57 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)
Crosscreek Avatar
57 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

16inchmacbookpromain

Kuo: New MacBook Pro Models to Feature Flat-Edged Design, MagSafe, No Touch Bar and More Ports

Thursday January 14, 2021 9:32 pm PST by
Apple is working on two new MacBook Pro models that will feature significant design changes, well-respected Apple analyst Ming-Chi Kuo said today in a note to investors that was obtained by MacRumors. According to Kuo, Apple is developing two models in 14 and 16-inch size options. The new MacBook Pro machines will feature a flat-edged design, which Kuo describes as "similar to the iPhone 12" ...
iphone x camera close

iOS 14.4 Will Introduce Warning on iPhones With Non-Genuine Cameras

Thursday January 14, 2021 8:07 am PST by
In the second beta of iOS 14.4 seeded to developers and public testers this week, MacRumors contributor Steve Moser has discovered code indicating that Apple will be introducing a new warning on iPhones that have had their camera repaired or replaced with aftermarket components rather than genuine Apple components. "Unable to verify this iPhone has a genuine Apple camera," the message will...
prototype iphone 12 pro

Prototype iPhone 12 Pro Shown Off in Photos

Wednesday January 13, 2021 3:39 pm PST by
Developer Giulio Zompetti, who often shows off prototype versions of Apple devices, today highlighted a prototype version of the iPhone 12 Pro. The iPhone 12 Pro is running an operating system called SwitchBoard, a nonUI version of the iOS 14 update that Apple uses internally. We've seen SwitchBoard on prototype devices before, as Apple uses it to test new features. Zompetti's prototype...
find my app safari post

Safari Allows Users to Enable Hidden 'Items' Tab in 'Find My' App Ahead of AirTags Launch

Wednesday January 13, 2021 5:45 am PST by
As seen in screenshots obtained by MacRumors in 2019, Apple's long-rumored AirTags items trackers are expected to be managed through the Find My app on iPhone, iPad, and Mac. Now, any user can get an early look at this tab. MacRumors reader David Chu today alerted us that the hidden "Items" tab in the Find My app can be enabled on an iPhone or iPad by typing in the link findmy://items in...
pioneer carplay wc5700nex

The Best Apple-Related Accessories at CES 2021

Wednesday January 13, 2021 1:16 pm PST by
CES 2021 is taking place digitally this year, and it hasn't been as exciting as in past years because many vendors have opted out. That said, some companies are still showing off some interesting Apple-related accessories that are coming out this year and that will be of interest to Mac, iPad, and iPhone users. Subscribe to the MacRumors YouTube channel for more videos. Pioneer Wireless...
Hue module dimmer switch

Philips Hue Announces New Wall Switch Module, Dimmer Switch, and Outdoor Light Bar

Thursday January 14, 2021 3:11 am PST by
Philips Hue has announced a new wireless dimmer switch module that lets Hue bridge owners directly control the smart lighting from their standard wall switches. The new Philips Hue wall switch module is the ideal addition to any Philips Hue set up. Installed behind existing light switches, it allows users to turn their existing switch into a smart switch and ensures their smart lighting is...
macbook pro 16 inch thunderbolt

Bloomberg: Next-Generation MacBook Pro to Offer Improved Displays, Faster Charging Over MagSafe

Thursday January 14, 2021 11:36 pm PST by
Following today's report from analyst Ming-Chi Kuo outlining major changes for the next-generation MacBook Pro models coming in the third quarter of this year, Bloomberg's Mark Gurman has weighed in with his own report corroborating some of the details but seemingly differing a bit on others. First, Gurman shares more details on the return of MagSafe charging to the MacBook Pro, indicating...
cook cbs this morning

CBS This Morning: Apple to Make 'Big Announcement' Tomorrow Morning

Tuesday January 12, 2021 8:46 am PST by
CBS This Morning today shared a short clip of an upcoming interview with Apple CEO Tim Cook in which addressing last week's events at the U.S. Capitol, with Cook saying "it's key that people be held accountable for it." Following the clip, Gayle King of CBS noted that the interview with Cook was not specifically arranged to address the current controversy over Parler and other repercussions, ...
iOS 14

Apple Seeds Second Betas of iOS 14.4 and iPadOS 14.4 to Developers [Update: Public Beta Available]

Wednesday January 13, 2021 10:03 am PST by
Apple today seeded the second betas of upcoming iOS 14.4 and iPadOS 14.4 updates to developers for testing purposes, with the new betas coming a month after Apple released the first betas. iOS 14.4 and iPadOS 14.4 can be downloaded through the Apple Developer Center or over the air after the proper profile has been installed on an iPhone or iPad. Paired with the HomePod 14.4 beta that is...
caldigit thunderbolt 4 dock featured

CalDigit Introduces USB-C Dock With 10 Ports and Up to 94W Charging for Macs [Updated]

Wednesday January 13, 2021 9:16 am PST by
CalDigit today unveiled a new Thunderbolt 4 dock with a wide selection of connectivity options, including three USB-A ports, one USB-C port, two HDMI 2.0 ports, a Gigabit Ethernet port, an SD card slot, and a 3.5mm headphone jack. The dock also has a Thunderbolt 4 port that allows it to be connected to a Mac with a single cable, with up to 94W of pass-through charging for the latest MacBook...