“European Union competition chief Margarethe Vestager tempered expectations of a speedy ruling on Apple Inc.’s tax affairs in Ireland,” Aoife White and Stephanie Bodoni report for Bloomberg. “‘Don’t hold your breath,’ she told reporters in Brussels on Monday about the timing of decisions targeting Apple and online shopping giant Amazon.com Inc, whose tax affairs in Luxembourg are also under intense scrutiny. ‘I’m just warning you.'”
“The two companies are slated to be next in the firing line months after the EU watchdog ordered the Netherlands and Luxembourg to recover as much as 30 million euros ($32.9 million) in back taxes from Starbucks Corp. and a Fiat Chrysler Automobiles NV unit respectively,” White and Bodoni report. “While Vestager refuses to be drawn into speculation, analysts say that in the Apple case, repayments could potentially dwarf those amounts.”
Read more in the full article here.
MacDailyNews Take: As we wrote last November: “Apple has repeatedly and confidently stated that they didn’t do anything that was against the law. Therefore, unless the EC tries to change the law retroactively, if that’s even possible, or tries to collect taxes retroactively in some other fashion, Apple is in the clear.”
There was no special deal that we cut with Ireland. We simply followed the laws in the country over the 35 years that we have been in Ireland. If the question is, was there ever a ‘quid pro quo’ that we were trying to strike with the Irish government – that was never the case. We’ve always been very transparent with the Irish government that we wanted to be a good corporate citizen… If countries change the tax laws, we will abide by the new laws and we will pay taxes according to those laws. – Apple CFO Luca Maestri
SEE ALSO:
Apple and Google stand by Europe tax deals; Rupert Murdoch weighs in – January 27, 2016
Apple CEO Cook lobbies EU antitrust chief over Irish back taxes – January 21, 2016
Think Ireland’s corporate tax is unfair? Wave goodbye to Apple and thousands of jobs if it’s changed – November 14, 2015
Apple announces 1,000 new jobs in Ireland as EU tax ruling nears – November 11, 2015
Apple tax probe won’t hurt Ireland, Finance Minister Noonan says – October 5, 2015
EU’s Vestager says will not complete tax inquiries of Apple, others in second quarter – May 5, 2015
Apple warns of potential ‘material’ financial damage from European tax probe – April 29, 2015
Apple may have to pay Ireland 10 years of back taxes – April 30, 2015
Ireland’s Prime Minister: Apple has nothing to fear from end of ‘Double Irish’ tax avoidance strategy – November 4, 2014
Apple says it may lose Irish tax break – October 31, 2014
Ireland to end tax lures that drew U.S. firms – October 14, 2014
EU tax probe spotlights Ireland’s allure for multinationals – October 13, 2014
EU watchdog to give reasons for inquiry into Ireland’s tax treatment of Apple – September 29, 2014
European Commission accuses Apple of prospering from illegal Irish tax deals – September 28, 2014
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
It is disingenuous to refer to the attempted “recovery” of taxes as “repayment.” Recovery implies that these funds were somehow lost when, in fact, all taxes were paid according to the laws in force at that time. If the EU wants to address what they view as tax loopholes, then fine. Go ahead. But do not be surprised if corporations react accordingly and in their best interests. This international “country shopping” will go on until the tax laws normalize and there is little value in corporate relocation.
Neither is it correct to refer to these taxes as repayment. Repayment makes it sound as if Apple somehow obtained money from the EU and needed to pay some of it back when, in fact, all of the tax money was transferred from Apple to the EU and was paid in full according to the laws in force at that time.
If the EU attempts to retroactively implement a different “interpretation” of the existing tax laws as they apply to Apple, then they had best settle in for a fight with an outcome that could best be described as a win-lose situation. The EU might railroad its way into a one-time tax windfall from Apple, but it will lose in the long term as businesses internalize the lesson and relocate.
Please keep in mind that my comments above should not be interpreted as pro- or anti-business in any way. They are simply logical interpretations of this particular situation. In the abstract, I am not overly concerned with the method of taxation as long as it is fairly applied and reasonably spreads the tax burden. In reality, the method of taxation is important, because it interacts with other factors on a global scale. As such, it may be more effective from an economic growth standpoint to derive tax revenues from the citizens rather than pushing business taxes. And I am fine with that as long as the wages of citizens are augmented to cover than new burden. The blood has to come from somewhere…you can’t keep cutting taxes and expect the total revenue to magically grow.
In my opinion, taxation should follow the following basic steps: 1) NEED: Calculate the amount of taxes needed to fund a prudent government spending plan, 2) STRATEGY: Decide how those taxes should be collected (and keep it as simple as possible without attempting social engineering, 3) ADAPTATION: Tweak the taxation strategy over time to address changes in revenue needs as well as economic and social changes, but with a primary objective of maintaining relative long term stability.
Businesses want and need stability for long term planning.
In a word: Extortion.