EU Apple Tax Decision: 13 Billion Euros
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Posted on 08/30/2016 6:43:13 AM PDT by sukhoi-30mki
You are overreacting. There are YEARS you court cases and appeals before anything actually gets paid.
Oh, Apple has to put the money in escrow, but since they are sitting on ~$214 Billion in cash, this is not a big deal. In the US, money in escrow can be in an interest-bearing account and I expect the same is true in the EU.
This decision did now come out of nowhere. It has been in the news for months. AAPL is down slightly today, which is a buying opportunity.
Warren Buffet just added about 5 Million shares of AAPL to his holdings. Anyone who thinks he is more financially astute than Warren please stand up.
Most freepers will just look at the headline and go
Apple good
European Union bad
But why did Ireland grant Apple these tax waivers or abatements and only to them?
Is it because the Apple plant is in Ireland?
But any other smartphone assembly in an EU member state did not get such a waiver
Is that the gist of it
I don’t care for the EU but I can see the argument at least at a glance if you are going to have an EU
I agree with posters who say the onus is shared by Ireland
Particularly if they got tax proceed or benefit such as the employees taxes which I’m sure they did come to think of it
What a mess with a superceding governing entity
The irony of the extreme left bilking and soaking one another
Well, I think BREXIT will come into play here. The EU has no authority over tax policy. This is specifically spelled out in the EU treaty. They do have anti-trust authority. So they are using anti-trust as a backdoor to control tax policy.
The high EU courts are going to decide whether or not anti-trust trumps sovereign tax authority. If so, I think there will be more countries leaving the EU. And there will certainly be more companies leaving the EU. I suspect they will go to England, or back to Bermuda.
If I were the Irish PM my response would be, “F*** EU!”
(-:
It would be amusing....after BREXIT....that all of these US companies quietly relocate into the UK and set up a massive empire to avoid EU taxation. Just off jobs alone....you could be talking about 250,000 technology-related jobs across all of the EU in some flux and desperate to find a low-taxation location.
The global CEO’s are liberals and hate American-Americans and our constitutional republic. I hope these open border, social engineering, globalist snobs suffer big time. They sure have hurt us with their globalist ideology and money for a long time now.
It would be amusing....after BREXIT....that all of these US companies quietly relocate into the UK and set up a massive empire to avoid EU taxation. Just off jobs alone....you could be talking about 250,000 technology-related jobs across all of the EU in some flux and desperate to find a low-taxation location.
That is EXACTLY what is going to happen.
And there you have it. The very essence of socialism!
Pehaps Ireland should proceed with a vote to do a Brexit too! American businesses have been good to Ireland. Time for Ireland to repay those “kindnesses.”
Apple iPhones are made in China long with pretty much all of their other products. The iMac manufacturing plant they have in Ireland is the only manufacturing facility that they still own in the entire world. It is completely out of their normal operating mode. They were had planned to shut it down years ago, but instead they expanded it... a little in the huge tax avoidance arrangement they made with the Irish government. So to save a few hundred assembly plant jobs and a few thousand phone support jobs Ireland gave Apple $14.3 billion in tax cuts which allowed the world's most profitable company to pay something like .005% on their European earnings.
The absurdity of the situation makes one wonder if the Clinton Foundation didn't have their fingers in the pie at some level. The only thing amazing to me here is that Apple's legal staff wasn't able to figure out a way to buy off enough of the corrupt political class to keep this scam going. It is a sure sign that they are slipping.
Apple pays .005% tax.
You and I pay 43% or more. I wish I knew some leprechauns to shelter my money.
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Apple: You can have taxes or you can have jobs, but you can't have both — Business Insider — August 30, 2016
by Jim Edwards
Apple's official statement on the EU ruling against its Irish tax arrangements tells you all you need to know about what is at stake: You can have taxes or you can have jobs, but Apple is in no mood to deliver both.
After learning on Tuesday morning that the EU expects Apple to pay 13 billion euros — equal to 11 billion pounds or $14.5 billion — in back taxes, the company said, "It will have a profound and harmful effect on investment and job creation in Europe."
That is not a threat, technically, but it will be seen as one by EU politicians who want to attract new companies to their countries.
In 1991, Apple struck a tax deal with Ireland that was aboveboard and legal. The Irish government provided Apple with a "comfort letter" that said the company would pay very low rates of tax if it based its European operations in Ireland.
In the 25 years since, Apple has created thousands of jobs in Ireland. By 2015, it had 5,000 employees in the country. Another 1,000 jobs are planned for the headquarters in the Irish city of Cork. This year, Apple will open its site near the town of Athenry, with another 200 jobs in the making.
Ireland doesn’t want Apple’s $14.5 billion in so-called back taxes — Mac Daily News — August 30, 2016Apple’s billions in back taxes could cover the entire annual Irish health budget, build about 100,000 homes for the poor or pay off a chunk of the nation’s debt,” Dara Doyle and Peter Flanagan report for Bloomberg. “So why doesn’t the government want the money?”
“Irish Finance Minister Michael Noonan on Tuesday vowed to fight a European Commission ruling that could force the world’s richest company to pay it at least 13 billion euros ($14.5 billion), more than twice the country’s entire 2015 corporate tax take and equivalent to about $3,000 for every man, woman and child,” Doyle and Flanagan report. “For the government, though, the stakes are higher. The country’s corporate tax regime is a cornerstone of its economic policy, attracting Google Inc. and Facebook Inc. to Dublin. Even when Ireland was forced to seek an international bailout six years ago, it resisted pressure to change how it taxes companies. While the Apple ruling doesn’t directly threaten the 12.5 percent rate, the government has promised to stand by executives it says are helping the economy. ‘To do anything else, it would be like eating the seed potatoes,’ Noonan told broadcaster RTE on Tuesday, adding a failure to fight the case would hurt future generations.”
“‘It’s all about our reputation,’ said Peter Vale, tax partner at Grant Thornton Ireland in Dublin. ‘It’s not the number that is a problem per se, it is the implication that Ireland engages in some kind of funny business around tax, the idea that we give special deals and so on,'” Doyle and Flanagan report. “The government maintains that even if it were to take the cash, European rules mean it would have to use the money to pay down some of its 180 billion euros of national debt rather than fund spending.”
Read more in the full article here.
MacDailyNews Take: Again, until this is all finally sorted out and the appeals are finished, anyone who decides to set up a business in a European Union member country today is insane.
Tim Cook attacks EU Tax Ruling in scathing latter — CNBC — August 30, 2016.
by Holly ElliottThe head of tech giant Apple has hit back at the European Commission's ruling about its tax operations in Ireland saying that it has "serious, wide-reaching implications."
Responding to the Commission's decision that Ireland should recover 13 billion euros ($14.5 billion) in back taxes from Apple, Tim Cook said that "in Ireland and in every country where we operate, follows the law and we pay all the taxes we owe."
Here is Tim Cook's letter in full:
A Message to the Apple Community in EuropeThirty-six years ago, long before introducing iPhone, iPod or even the Mac, Steve Jobs established Apple's first operations in Europe. At the time, the company knew that in order to serve customers in Europe, it would need a base there. So, in October 1980, Apple opened a factory in Cork, Ireland with 60 employees.
At the time, Cork was suffering from high unemployment and extremely low economic investment. But Apple's leaders saw a community rich with talent, and one they believed could accommodate growth if the company was fortunate enough to succeed.
We have operated continuously in Cork ever since, even through periods of uncertainty about our own business, and today we employ nearly 6,000 people across Ireland. The vast majority are still in Cork — including some of the very first employees — now performing a wide variety of functions as part of Apple's global footprint. Countless multinational companies followed Apple by investing in Cork, and today the local economy is stronger than ever.
The success which has propelled Apple's growth in Cork comes from innovative products that delight our customers. It has helped create and sustain more than 1.5 million jobs across Europe — jobs at Apple, jobs for hundreds of thousands of creative app developers who thrive on the App Store, and jobs with manufacturers and other suppliers. Countless small and medium-size companies depend on Apple, and we are proud to support them.
As responsible corporate citizens, we are also proud of our contributions to local economies across Europe, and to communities everywhere. As our business has grown over the years, we have become the largest taxpayer in Ireland, the largest taxpayer in the United States, and the largest taxpayer in the world.
Over the years, we received guidance from Irish tax authorities on how to comply correctly with Irish tax law — the same kind of guidance available to any company doing business there. In Ireland and in every country where we operate, Apple follows the law and we pay all the taxes we owe.
The European Commission has launched an effort to rewrite Apple's history in Europe, ignore Ireland's tax laws and upend the international tax system in the process. The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals. We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don't owe them any more than we've already paid.
The Commission's move is unprecedented and it has serious, wide-reaching implications. It is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been. This would strike a devastating blow to the sovereignty of EU member states over their own tax matters, and to the principle of certainty of law in Europe. Ireland has said they plan to appeal the Commission's ruling and Apple will do the same. We are confident that the Commission's order will be reversed.
At its root, the Commission's case is not about how much Apple pays in taxes. It is about which government collects the money.
Taxes for multinational companies are complex, yet a fundamental principle is recognized around the world: A company's profits should be taxed in the country where the value is created. Apple, Ireland and the United States all agree on this principle.
In Apple's case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules.
Beyond the obvious targeting of Apple, the most profound and harmful effect of this ruling will be on investment and job creation in Europe. Using the Commission's theory, every company in Ireland and across Europe is suddenly at risk of being subjected to taxes under laws that never existed.
Apple has long supported international tax reform with the objectives of simplicity and clarity. We believe these changes should come about through the proper legislative process, in which proposals are discussed among the leaders and citizens of the affected countries. And as with any new laws, they should be applied going forward — not retroactively.
We are committed to Ireland and we plan to continue investing there, growing and serving our customers with the same level of passion and commitment. We firmly believe that the facts and the established legal principles upon which the EU was founded will ultimately prevail.
Tim Cook
No, the way our tax structure works, Apple would get to DEDUCT the taxes they pay off shore from their US Income Taxes. That means LOWER taxes paid to the Democrats here. Why do you think the Obama administration is so vehemently opposed to this?
Apple pays an effective 27% Corporate income tax rate in the US. . . but if they have to pay $14.5 billion to Ireland, all of that get's paid over seas, and NOT HERE.
Tim Cook appeared before a US Senate committee asking for essentially the same thing, telling them that the current 35% tax rate just to bring home the money that Apple has ALREADY earned home is ridiculous. The USA is one of only two countries in the world that has such a idiotic law that prevents its own companies from bringing their own assets home to invest AT HOME. The other is a landlocked African Socialist Dictatorship with no multinational corporation headquartered within its borders.
They didn't. There were many other companies who took advantage of Ireland's lower tax rate for companies wiling to locate there. When Apple did it in 1991, Apple was NOT a huge company as the EU is trying to characterize this deal. Apple grew into a large company not because of the tax deal but for other reasons.
Uh, then what is this manufacturing plant down the road from my Sacramento home in Elk Grove, California, making iMacs? How about the one in Austin, Texas, manufacturing Mac Pros? That one was built in 2012/2013. You are making claims you don't know to be true. iPhones are also manufactured in Brazil. Again, proving you don't know what you are talking about. Apple is also looking to build manufacturing operations in India.
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