EU sues Ireland over $15.3 billion tax clawback from Apple

“Ireland is being sued by the European Union authorities for failing to collect a year-old bill of as much as 13 billion euros ($15.3 billion) from Apple Inc. in a move that risks escalating tensions over the nation’s tax policies,” Dara Doyle reports for Bloomberg.

“The European Commission on Wednesday referred Ireland to the European Court of Justice for failing to recoup the Apple bill, which was first reported by Bloomberg News Monday,” Doyle reports. “The money, which was initially due by Jan. 3, won’t be collected for another six months at least, the EU said. ‘We of course understand that recovery in certain cases may be more complex than in others, and we are always ready to assist,’ EU Competition Commissioner Margrethe Vestager said in an emailed statement. ‘But member states need to make sufficient progress to restore competition.'”

“While Apple and Ireland are appealing the decision, the country is still facing European pressure over its resistance to a new set of rules for taxing tech companies,” Doyle reports. “‘The work on the establishment of the fund to deal with the unprecedented recovery amount will continue, notwithstanding the fact that the commission has taken this wholly unnecessary step,’ the Irish finance ministry said in an emailed statement.”

Read more in the full article here.

MacDailyNews Take: The dunce Vestager is out of her depth.

Is Ireland its own country or merely a vassal state to a quasi-governmental political confederation that’s already been hit with one very significant defection?

The EU’s retroactive tax grab is a farce.

Anyone who decides to set up a business in a European Union member country today is insane.MacDailyNews, August 30, 2016

SEE ALSO:
Ireland opposes EU’s 13 billion euro Apple tax grab, calls it unjustified – August 17, 2017
Apple close to deal protecting Ireland in fight over EU tax grab – August 11, 2017
Ireland seeks custodian for Apple $15.2 billion in back taxes as collection nears – July 22, 2017
EU Commissioner Vestager: Ireland ‘taking too long’ to recover Apple tax – May 19, 2017
EU’s hypocritical Margrethe Vestager going after Apple while backing Madeira tax avoidance scheme – February 14, 2017
Apple has missed the deadline to pay $13.9 billion to Ireland in illegal tax benefits – January 31, 2017
Apple CFO Maestri: What the EC is doing here is a disgrace for European citizens, it should be ashamed’ – December 19, 2016
Apple’s EU tax nemesis Margrethe Vestager takes aim at other U.S. companies’ offshore profits – September 19, 2016
The ‘Brexit-Apple’ connection: What in the world was Margrethe Vestager thinking? – September 12, 2016
EU ministers line up to take tax bites out of Apple – September 12, 2016
Former EU competition commissioner: Vestager claim that Apple owes back taxes an incorrect use of EU law – September 2, 2016
Irish government to fight EU on Apple tax – September 2, 2016
Treasury accuses EU of trying to steal U.S. tax revenues with Apple decision – September 1, 2016
Irish residents opposed to EU’s tax demand of Apple – September 1, 2016
Apple Inc. pushes back against EU tax grab – September 1, 2016
Apple may repatriate billions of dollars next year after new U.S. President takes office – September 1, 2016
U.S. tax code allows for dramatic retaliation against EU overreach in Apple case – September 1, 2016
Apple CEO Tim Cook on EU tax demand: ‘No one did anything wrong here and Ireland is being picked on… It is total political crap’ – September 1, 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

30 Comments

    1. For only about the dozenth time, this is not a “tax grab.” The money (if the European Court of Justice decides that Apple owes anything additional) is going to Ireland, not the EU, so the European Commission can’t use it to bludgeon voters in Catalonia or anybody anywhere else.

      Other than possibly the court costs, the EU as an organization will not see a single euro out of this. They are bringing this action just to establish that member states cannot offer tax deals of this nature.

      Ireland—which stands to gain $15Bn—doesn’t want the money, because it would rather establish that it CAN offer deals like this under European law. Apple does want the money. I personally think they should keep it, but I’m not the court with jurisdiction. I don’t practice EU treaty law and don’t know that much about it, but I seriously doubt that anybody else who is posting here knows any more about it than I do.

      To reply to the MDN take: Of course Ireland is its own country. That is why it is free to enter into treaties with other countries. What it is not free to do is enter into a treaty and then break it without consequences. Since the treaty obligations were already in place when Ireland made the arguably illegal inducement to Apple, this is not a “retroactive tax grab,” any more than an effort by the IRS to collect taxes that were due in prior years constitutes an ex post facto exaction.

      Allowing a country to enter into a treaty, reap all the benefits from it, but bear none of the costs is just like allowing a company to enter into contracts without paying the contractors. Keeping people, companies, and countries from doing that is why we have laws and courts to enforce them.

        1. Ok, then, please explain how $15Bn in additional tax revenue for the Irish government translates into any additional income for the EU authorities. “BS” isn’t an explanation. Information about the sources of EU revenue is readily available online, and none of those sources will be affected by an Irish tax windfall, any more than an influx of cash to a US state government would directly benefit the federal government.

  1. “The EU’s retroactive tax grab is a farce”

    The taxes are to be paid to Ireland, not the EU at large. According to EU rules, Ireland can tax ALL companies, as it wishes, equitably, but it cannot make special deals with companies over others. This is Ireland’s fault.

    1. This is money that would’ve come to the States had corporate tax rules not been so misguidedly ignored by mostly Democrats. Which is why many in government are saying “they’re trying to take our money!” But then you didn’t allow a 15-20% rate to repatriate those funds.

      Money doesn’t like a vacuum so when it just sits there others will figure out how to appropriate from it. You lose U.S.! (And I am a U.S. citizen.)

    2. It’s a manner of speaking.

      Ireland is not asking for any additional taxes, the EU is trying to force Ireland to get the taxes. So, in a manner of speaking, it’s the EU, right?

      1. I repeat the collected taxes are intended to stay in Ireland.

        To put it another way, Ireland can even claim a zero corporate tax rate. What they cannot do is offer Apple zero and Google any other non-zero rate. They have to treat all the same. That is the EU law as I understand it.

  2. “Is Ireland its own country or merely a vassal state to a quasi-governmental political confederation that’s already been hit with one very significant defection?
    The EU’s retroactive tax grab is a farce.”

    You might disagree with EU policies, but it helps to understand them so you don’t sound clueless. The EU complaint is that they have rules regarding competition. Member countries have supposedly _agreed_ to abide by the rules set by the EU. So, if a rule says that tax policies can’t be made overly-generous to a corporation in order to steal its business from other countries, the country that does so will be told to collect taxes that negate that “unfair” advantage.
    The point of that policy is to not let member countries act as havens, of a sort.

    You might think that isn’t a good policy, but the MDN Take makes it sound like you don’t even know what’s going on. I think you’re actual Take, if you understood the situation properly, would be something like this:
    “Unfettered ability to adjust tax policies within member states is GOOD for competition, so Ireland should be able to lure corporations in a way that leaves more money for the corporation than if it located elsewhere.”

    I’d disagree with that, since that basically creates a race to the bottom, where the corporations maximize profits at the expense of the people, but at least your position would be based on something real.

    1. Yes, but two things: one, why are the Irish disagreeing with the EU’s decision; and two, why did the EU decision come up with two totals, one about $14B, and the other about $1B, and make a justification for both? Can both be right? Doesn’t that undermine their argument for either?

      1. Both good points that I don’t know the answer to, KenC. I feel like your questions are closer to discussing the actual situation/controversy than the MDN Take’s confused misrepresentation of what’s going on. It’s almost as if MDN has an ideological viewpoint that got them so upset they couldn’t think clearly enough to even figure out what they were supposed to be mad about. I think MDN’s editors _would_ disagree with the EU policy if they understood what was happening, but they can’t even gets their thoughts straight enough to know what to criticize.
        A common side-effect of fundamentalist positions (in this case, “invisible hand of the market” fundamentalist capitalism).

  3. Do any of you ignoramuses know the slightest thing about international tax law and practise? I think not. Apple, along with many other companies, been indulging in what is known as “transfer pricing”, in short not charging Group companies with correct amounts, or inventing spurious costs such as patents or royalties to put their profits in places with the lowest possible tax costs. Mind you, I suppose you are Americans so know everything or you think you do.

    1. Actually, Apple pays plenty of tax, more than most companies, and I’m not talking about nominal amounts, but actual percentages. What is at issue is to which national treasuries Apple is paying them to. The less tax Apple pays internationally, the more tax Apple must pay to the US. The US Treasury is the beneficiary, that’s why the US Treasury supported Apple’s position against the EU prior to the EU’s decision.

  4. “Suffice to say, if you’re an off-topic poster or just issuing ad hominem attacks, you will be moderated and your posts will be removed. If you continue, you will be banned and your screen name will become unusable, so you’ll be forfeiting your identity, too.”
    MDN

    “The dunce Vestager is out of her depth.”
    MDN

    Definitely not leading by example, and placing themselves above their rules. Such a patriot display, that is if you are from Apple’s home nation.

    Meanwhile about the topic at hand, I don’t have a comment until the final appeal.

    1. Rules (and taxes) are for the little people. (And Leona Helmsley / Larry Page didn’t refer to leprechauns.)

      Rules are made to be broken, usually by the Lord who who made them up. A Lord doesn’t lead you by example; he leads by making an example of you.

      1. Rules and regulations are for right brained half wits addicted to language and logistics ignoring the alternative navigation by intuition and other holistic approaches.

        There is a lack of harmony when someone doesn’t follow the rules that others are expected to follow. It’s called being above the law, or someone from your country, depending on the situation.

        White man speak with forked tongue is a good way to illustrate it.
        Karma’s going to be a bitch is a great way to watch it be implemented.

        Now, please excuse me, I have another hurricane to bless.

        Have a good day, while you still can.

          1. See? It’s so very easy to make a serious error when only two possibilities are admitted. “Off with her head! — oh, wait, I meant his head.. oh, fiddlesticks. Guards, dispose of the body. Bertie, make up a story for the scribblers as to what happened. Cheerio!”

        1. Just part of their DNA (Destructive Nuclear Arsenal), ignore the treaty, ignore the white flag, ignore the declaration of human rights and the list goes on and on and on as they rant and rant and rant.
          Hence it’s become a nation of ignore rants.

  5. On the issue of taxes, and specifically within the US, city, county, state, and fed. laws mandate that the merchant must pay taxes on the merchandise it sells. A customer is not legally bound to pay tax on merchandise; It’s not mandatory.

    So why do you pay those taxes on shoes and soda? It’s because you volunteer to. The merchant would not hand over the item if you did not pay that tax for, FOR, the merchant.

    Maybe this scheme is relatable to Ireland/Apple/EU.

    As an aside, a customer could theoretially walk ouf a US store without paying tax and he/she would not be breaking the law, right?

  6. At least in Texas, and I suspect in most other states, the sales tax (8.5% around here) IS paid by the consumer. The merchant collects the tax and hands it over to the state, but does not pay it. Some stores have “tax-free sales,” but they are still collecting the tax, just reducing the price of the item to produce the same result for the customer.

    You may be thinking of a value added tax, which IS paid by the merchant and not the consumer. That’s why prices in the US are quoted without the tax, which is added to the bill at the point of sale. In Europe and other VAT countries, the taxes are included in the marked price and that is all that the customer pays.

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