“On June 10th, the European Commission announced that it would launch a formal investigation of Apple’s (AAPL) tax arrangements in Ireland,” Kyle Spencer writes for Seeking Alpha. “The European Commission and ECN together comprise the enforcement end of Europe’s competition law regime, which functions in a similar fashion to the U.S. antitrust laws in preventing the formation of market leaders, cartels and monopolies, as well as regulating market leaders and state aid. That puts Apple’s Double Irish with a Dutch Sandwich tax avoidance strategy squarely within the Commission’s purview.”
“The Commission’s decision to crack down on Ireland’s tax laws isn’t happening in a vacuum,” Spencer writes. “Rather, it’s part of a global crackdown on multinational corporations launched by the OECD and endorsed by the G20 known as the Base Erosion and Profit Shifting Action Plan, or BEPS, scheduled to launch late next year… While U.S. multinationals are furiously lobbying against BEPS in Washington, it’s unclear what the US Congress can actually do to stop its implementation. Taxation is fundamentally sovereign prerogative, and BEPS is a non-binding policy prescription. The adoption of tax harmonization rules by the majority of European states would effectively eliminate most of the available opportunities for treaty arbitrage regardless of US adoption.”
“If there’s one thing the markets hate more than higher taxes, it’s uncertainty about higher taxes. I expect the market to throw a temper tantrum once it sinks in that Europe and other OECD member states might actually be coming to collect,” Spencer writes. “Investors should keep one eye on the progress of OECD BEPS and the other on tech valuations over the next 12 months and ask themselves if the former is accurately priced into the latter. If not, the correction will be both swift and painful.”
Read more in the full article here.
Related articles:
EU threatens expanded probe into Ireland’s tax practices regarding Apple, Googles, other companies – June 20, 2014
EU’s investigation of Apple’s taxes isn’t going to cause the company any problems – June 13, 2014
EU launches tax avoidance investigations on Apple, Starbucks, Fiat – June 11, 2014
Not in Taxes anymore: On site at Apple’s famous Irish ‘headquarters’ – November 2, 2013
Regan: U.S. tax code spurs loveless foreign corporate ‘marriages’ – May 13, 2014
Ireland to close Apple’s tax loophole, but leave bigger one open – October 15, 2013
G20 think tank OECD proposes blueprint for global crackdown on tax avoidance – July 19, 2013
Thomas Sowell on Apple, corporate taxes, and ‘the road to serfdom’ – May 28, 2013
Taxing Apple just taxes you – May 24, 2013
Don’t tax Apple, tax its shareholders – May 24, 2013
If Apple paid more tax, we might pay less or something – May 22, 2013
Apple CEO Tim Cook pounds another nail into the Keynesian coffin – May 22, 2013
Apple CEO Cook makes no apology for company’s tax strategy – May 22, 2013
“IS Apple’s tax bill about to get much, much bigger?”
No, until Ireland will change its rules, and it is not going to change them, so nothing will change for Apple.
Thanks God. Now we all know.
Rules and laws do not matter to Obama. My next door neighbor had four very successful GM dealerships stolen from her by the Obama administration in an arbitrary “taking” (aka, “theft) by Obama. She and her family are in the midst of a 4 year old lawsuit that will go years more at a cost to her of millions. And all started with a theft of her property by the Obama thugs with zero due process. Zero. So, Apple can have its money taken if Obama declares an economic emergency and he needs piles of cash to “feed the children”. Obama does whatever he wants. Laws are jokes to him and his fellow Democrats.
Very little to do with the EU and Ireland though.
Obama is an international communist whose best friends are running the EU oligarchy. He would gladly cut a deal where the US an EU split Apple’s “excess profit” since Obama does not like anyone’s profit, except his own.
Blah blah blah Obama blah blah blah Obama blah blah….
The truth is hard for some to accept – those who voted for this jackass. But it is what it is.
I would have voted for McCain if he weren’t for the Iraq war and chosen a stupid running mate… and I would have voted for Romney if he weren’t a liar/hypocrite and for government mandated health care just as much as Obama.
So you instead voted for the first President afraid to reveal his college transcripts because he did so poorly and the Vice President who appears to be trying to imitate Rodney Dangerfield in Caddyshack when he speaks in public. Sarah Palin has ten times the brain capacity of any of the others and 100 times the moral character. Palin actually kept all her official emails, didn’t destroy any of them as Obama’s IRS had to do to hide their criminal actions. And of course Palin pointed out the existence of “death panels” in ObamaCare, which was mocked at the time, and then was proven to be the actual truth. Obama on the other hand lied about every key aspect of ObamaCare to fool the public during its passage. So, in sum, you seem to prefer corrupt Marxists and blithering idiots over intelligent public servants, like Palin.
Christ, aren’t you sick to death of whining yet? Your guy lost, twice. Get over it.
“Sick of whining”??? Your bozo President is still bling Bush for the current economy five years after he promised to fix it if elected. I only whine about murderous tyrants who let good people die in an American embassy while he has a trust with his bodyguard.
So now his birth certificate also says that he’s Irish. Who knew?
“If there’s one thing the markets hate more than higher taxes, it’s uncertainty about higher taxes.”
Is there any evidence for this? I didn’t think so.
If the Irish taxes go up, they go up for all like businesses in their country, and Ireland does NOT want to lose large businesses from their domicile.
Hence, I doubt things will change quickly.
They should investigate Ireland’s tax structure and leave the companies out of it. Most if not of the companies based in Ireland do so because of the tax structure. The politicians put this complicated structure on place to please corporations donating to campaigns. There is a direct conflict of interest in politics these days and this is what you get. Decisions are no longer made on the basis of what is good for a country or it’s people but rather what will keep donators happy.
Political rant over. Have a great day everyone.
Medtronic, a Minnesota based company, just announced it is purchasing Covidien, a Irish company. Medtronic is moving it’s headquarters to Ireland simply for tax reasons. It’s hard to blame them. However, there is a proviso to back out of the deal if the tax laws suddenly change in Ireland or the USA.
Smart businesses will continue exiting the US to get away from
Barack Obama and the institutionalized theft of the Democrat Party.
Medronic is a small company, moron.
Asswipe, Medtronic is the worlds fourth largest medical device company. It is a key source of medical innovation in the US – till now. Now, the management is looking at the dipshit free enterprise hating President and the equally business hating Democrat Party and it is now leaving. Apple was once a company the size of Medtronic but it fortunately was then a part of a country that appreciated profit making and innovative companies like Apple. That was then. Now due to shithead voters like you we are led by an imbecile President and a band of dunces who follow him in his hate for America.
Indeed. The Jimmy Carter administration was a fabulous time. Shame about what came next though.
Yes, Jimmy Carter facilitated the coup which brought the Allatollah Khomeini to power and unleashed Islamic radicalism across the world. That is what Carter bequeathed us along with a dead economy. Fortunately Ronald Reagan restored American confidence and lower taxes and big reductions in federal regulations and he spurred the largest economic expansion ever and he did it without the Federal Reserve pumping trillions of fake money into the economy. He did it with free enterprise and capital formation that Apple Computer was a prime example of. We need a new Reagan to clean out the filthy stables left by this crew of useless squatters.