Apple: The European Union’s pointless tax crusade

“The executive arm of the European Union, the European Commission, has decided that Apple received illegal tax breaks from Ireland. The EC is now embarked on a crusade to force Ireland to recover back taxes of $14.5 billion it claims Apple should have paid, despite a warning from the US Department of the Treasury not to go there,” Mark Hibben writes for Seeking Alpha. “Almost certainly, the EC will fail in its attempt at retroactive taxation.”

“The basis of the EC complaint is not that the tax avoidance scheme was illegal in itself. The EC’s complaint is that it amounted to preferential treatment for Apple and a number of other large multinational corporations, most of them based in the US. This constitutes illegal ‘state aid,’ according to the EC. Members of the EU are forbidden to support preferentially particular businesses. Any government aid or support must be available to all companies that seek to do business in member countries,” Hibben explains. “”

The U.S. Treasury “makes a very good case that what the EC has done in the Apple case (and in other cases it is pursuing against Starbucks, Fiat, and Amazon is to interpret the concept of state aid much more broadly,” Hibben writes. “Apple was not the only multinational to exploit double Irish… 15 other US multinational corporations also indulged, including Abbott Laboratories, Adobe, Facebook, Google, IBM, Microsoft, Oracle, and Yahoo. How then can the EC claim that Apple received preferential treatment in violation of EU regulations regarding state aid?”

“Treasury points out that it’s a departure from previous interpretations and legal decisions by the European Court of Justice (ECJ). Treasury is probably right about this. And this is the reason why it’s going to be so difficult for the EC to make good on its $14.5 billion claim. As a new legal interpretation, even if held to be valid, the EC can’t retroactively apply it to a member country such as Ireland,” Hibben writes. “Ireland will appeal the EC decision to the Court of Justice. The Court will probably agree that the EC’s interpretation of state aid is novel and therefore cannot be applied retroactively. That’s assuming it even agrees with the new interpretation. And then there’s all that political and economic pressure that the US is clearly intent on bringing to bear.”

Read more in the full article here.

MacDailyNews Take: Margrethe Vestager looks the fool.

As we wrote on August 25th:

There’s nothing like the world’s preeminent superpower playing hardball with some quasi-governmental political confederation that’s already been hit with one very significant defection and the existential threat of widespread desertions hanging over its collective head.

If the EU demands so-called “back taxes” from Apple, it’ll be based invisible legal grounds since the company simply followed the law when paying their taxes.

SEE ALSO:
Irish cabinet may be given more time to decide on Apple tax appeal – August 31, 2016
Post-Brexit Britain could benefit greatly from EU’s tax attack on Apple and Ireland – August 31, 2016
Ryanair CEO Michael O’Leary on Apple tax row: Irish government should tell EU to f**k off – August 31, 2016
U.S. taxpayers could end up paying Apple’s bill for back taxes in Ireland – August 30, 2016
Morningstar: Apple remains fundamentally undervalued after EU tax grab – August 30, 2016
Obama admin worries EU’s Apple decision will cost U.S. taxpayers; Bernie Sanders applauds EU tax demand – August 30, 2016
Ireland doesn’t want Apple’s $14.5 billion in so-called back taxes – August 30, 2016
U.S. Treasury: The European Commission’s retroactive tax demands on Apple are unfair – August 30, 2016
EU demands Apple pay massive $14.5 billion in taxes plus interest – August 30, 2016
Apple CFO Maestri: Despite EU tax ruling, we will continue to invest in Ireland – August 30, 2016
Apple CEO Cook blasts European Commission for ‘ignoring Ireland’s tax laws, upending the international tax system’ – August 30, 2016
European Commission to rule Ireland’s tax arrangement with Apple illegal – August 29, 2016
Ireland prepares for a fight with EU over Apple tax clawback – August 29, 2016
U.S. government warns EU: Do not hit Apple with a massive back tax bill – or else – August 25, 2016
European Commission denies anti-U.S. bias after U.S. Treasury intervention over Apple, Amazon tax probes – August 25, 2016

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

12 Comments

    1. The height of hypocrisy. Just imagine the back support Owed by the EU to Boeing to “even up” European state support to Airbus. Those bureaucratic fool have no idea the can of worms they have opening themselves up to.

  1. The EU is doing a great PR job of showing all the other member countries why they should exit the EU.

    Another nail in the coffin of one-world-government and the dictators who want to control it.

    1. Heads will be spinning at the speed of which Ireland will switch from “remain” to “run away as fast as we can and don’t look back”. Nokia is a perfect example of how most European countries have difficulties competing. Where are the European Starbucks, Facebook, Google, etc. If you cannot compete, then restrict, regulate, roadblock, back tax. See how that works out for you EU.

  2. If we were to broadly interpret US citizen taxation with the same brush as this EU decision, any deduction of housing loan interest on taxes due, should be considered state aid and therefore labeled housing subsidy.

    How dare they. The richer you are the greater the subsidy.

    This just flies in the face on perspective. Since Apple is not singled out as a favored corporation to Ireland’s tax rules, which also includes other European corporations, I am left with the impression that this $14 billion dollar tax bill is simply a money grab, as we see time and time again in various sectors of society. Everyone hates seeing someone else’s cache hoard.

    1. It is actually a power grab and statement of authority. It is not really a money grab, as the money would actually go to Ireland, and the Irish government has stated clearly they don’t want the money, which is impressive in its own way as the $14 billion is equal to 10% if the Irish national budget. I can’t ever see an American politico in turning down that kind of windfall

  3. Paying a nominal rate of .05% isnt something that will endear Apple to people. When personal tax rates, even in the US are higher, well i have no tears to shed for someone like Apple.
    If Samsung was doing this, you would sing a different tune. It has become like politics. Too bad. There is a responsibility that corporations should honor, but i guess you dont care about that.

  4. “it’ll be based invisible legal grounds since the company simply followed the law when paying their taxes.”

    Well… that’s kinda like saying it obeyed California law whilst breaking US Federal law. That may not be a winning argument.

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