Apple / Ireland Tax

[marty998]

Can someone closer to the action than me explain this? News headline was that:

- Apple did a sweetheart deal with the Government to pay 1% corporate tax in Ireland
- European courts struck it down as a non-allowable subsidy under EU trade rules
- Apple intends to appeal the judgement to pay xx billion
- Government of Ireland doesn't actually want Apple to pay because it would set a precedent that would discourage other multinationals from setting up shop there
- UK, France, Germany are happy with the ruling, because Ireland has been whoring itself out to US companies and there's no business going their way.
- Both Apple and Ireland will appeal the ruling

Supposably it is a left wing party in Ireland that is asking Apple not to pay the tax???

I guess this highlights the sovereignty problems associated with the EU and is a reason why the UK wanted out???

Finally, the obvious question: Has the world gone mad?

[arebelspy]

That about sums it up.

Finally, the obvious question: Has the world gone mad?

Yes.

:)

[valsecito]

Can someone closer to the action than me explain this? News headline was that:

- Apple did a sweetheart deal with the Government to pay 1% corporate tax in Ireland

Apple pays between 0.05 and 0.005% of corporate tax in Ireland.

Basicly, what happens is:
1) Siphon off as much EU profits as possible to Irish company 1. That is not the issue here.
2) Move profits into tax havens untaxed by extremely aggressively using the double Irish with a Dutch sandwich. https://en.wikipedia.org/wiki/Double_Irish_arrangement . Apple is using this fiscal loophole-you-can-fly-a-747-through _very_ aggressively. It is especially scandalous if you ask me, but it's being phased out in 2020. It is also not the issue here.
3) Have a sweetheart deal with the Irish government not based on anything remotely like the OECD guiding principles for most of the things not siphoned off through 1 or 2. Pay ridiculously little instead of the official 12.5% corporate tax rate. The crux of the issue right now is in here. The European commission is complaining that Ireland should apply taxation rules more or less equally for all companies.

- European courts struck it down as a non-allowable subsidy under EU trade rules
- Apple intends to appeal the judgement to pay xx billion
- Government of Ireland doesn't actually want Apple to pay because it would set a precedent that would discourage other multinationals from setting up shop there
- UK, France, Germany are happy with the ruling, because Ireland has been whoring itself out to US companies and there's no business going their way.
- Both Apple and Ireland will appeal the ruling

Supposably it is a left wing party in Ireland that is asking Apple not to pay the tax???

I guess this highlights the sovereignty problems associated with the EU and is a reason why the UK wanted out???

Finally, the obvious question: Has the world gone mad?

[libertarian4321]

The reason Ireland is willing to fight the EU's shake down attempt is because if the EU manages to extort the money from Apple, it will set a bad precedent.

Ireland's economy has thrived by tempting major multinational corporations (Apple, Dell, and dozens of others) to come there because of low taxes.  They are giving up tax revenue from the corporation for JOBS and the money Apple and it's suppliers pump into the economy.  Plus, they get to tax the workers.  So Ireland not only gets jobs, they make plenty of money, despite the low corporate tax rate.

If the EU extorts a retroactive tax, Ireland will no longer be able to do that.  Aside from the low taxes, THERE IS NO REASON TO BE IN IRELAND, and the Irish know that.  Before priming the economy with those tax breaks, Ireland's economy was essentially beer, tourism, and subsistence agriculture- in other words, the Irish economy was essentially non-existent. 

Those folks working at Apple and Dell and the like do not want to go back to tending sheep.

They know that if they lose the tax benefit, and the companies go to the UK or Norway or Albania or Morocco or Costa Rica or wherever.

Hence the reason both Apple and the Irish government are telling the EU to go screw itself.

The EU, like any government bureaucracy, has an insatiable desire for money.  They don't care if they ruin the Irish economy, as long as they can get their mitts on that money.

[Little Aussie Battler]

It is completely inaccurate to characterise this as an EU 'shake down attempt'.

[libertarian4321]

It is completely inaccurate to characterise this as an EU 'shake down attempt'.

What would you call it when two parties (Ireland and Apple) reach an agreement.  Both parties happily abide by the agreement for years.  Then a third party comes in later and retroactively tries to void the agreement and grab BILLIONS of dollars?

You are right, it's not a criminal "shake down."  Criminal shake downs are for small amounts of money. 

This is far worse.  "Shake down" doesn't do it justice. 

The EU is trying to steal BILLIONS from Apple while destroying the Irish economy.  It's far worse than a strong arm shake down.

Maybe calling it out and out robbery would be more appropriate?

This kind of behavior by largely unaccountable bureaucratic overlords (the EU) justifies the actions of the pro-Brexit folks. 

If the Irish had any cojones, they'd tell the EU to screw itself.

[marty998]

Ireland and Apple have come to an agreement that creates an unfair playing field for competitors.

Regardless of what your view is with respect to tax, a fundamental principle needs to be in place that taxes (of whatever amount) need to be applied equitably to all.

If Apple has a 0.05% tax rate, it is manifestly unfair to direct competitors that have to pay more, in the same country. Without competition, Apple will act like a monopoly and charge monopoly prices, to the detriment of consumers globally. Lets be honest, they already are, and it's ultimately bad for everyone.

My understanding is that the EU is simply asking Ireland to enforce it's own tax laws, and charge Apple the Irish Company tax rate. It's a long bow to draw to call it "extorting", or "stealing".

[libertarian4321]

Ireland and Apple have come to an agreement that creates an unfair playing field for competitors.

Regardless of what your view is with respect to tax, a fundamental principle needs to be in place that taxes (of whatever amount) need to be applied equitably to all.

If Apple has a 0.05% tax rate, it is manifestly unfair to direct competitors that have to pay more, in the same country. Without competition, Apple will act like a monopoly and charge monopoly prices, to the detriment of consumers globally. Lets be honest, they already are, and it's ultimately bad for everyone.

My understanding is that the EU is simply asking Ireland to enforce it's own tax laws, and charge Apple the Irish Company tax rate. It's a long bow to draw to call it "extorting", or "stealing".

Ireland has been giving tax breaks to lure big companies for DECADES.

Not just Apple, but dozens of others.

The EU is going after Apple not to "enforce equity," but just to grab money.

Note:  Ireland isn't complaining.  Apple isn't complaining.  Neither are Dell or any of the other companies that have invested in Ireland.  The EU is sticking it's nose in only to make revenue for it's own bureaucracy.  It's a naked retroactive money grab.

BTW, those "tax breaks" have turned Ireland from an economic basket case, a sleepy agricultural backwater who's only claim to fame was "hey, we're doing better than Albania!" From a nation that produced sheep and peet to a modern knowledge economy, one of the fastest growing economies in Europe for most of the past 25 years.

If the EU bureaucrats succeed in shaking down Apple and Ireland, they'll go after all the others (the richest first, of course, since this is a shakedown) too.  And NO ONE will ever invest in Ireland again.  Dell, Apple and the rest will leave.  And the Irish will be back to herding sheep and gathering peet for a pittance.

The EU bureaucrats are not only screwing the Apple and other companies, they are attempting to trash the thriving Irish economy.

And that is why the Irish are fighting their EU overlords over this. 

It's not only about the economy, but about sovereignty.  If the EU thugs succeed in their shakedown, the elected government of Ireland will be nothing more than powerless figureheads who do nothing but enforce the will of their EU overlords.

If that happens, don't be surprised if Ireland and others do their own version of "Brexit."