EU says Ireland’s Apple complaint will only be dropped if it takes the full $16 billion in tax clawbacks

“The European Commission will withdraw its complaint against Ireland for not recovering 13 billion euros ($16 billion) in unpaid taxes from Apple, but only if the country recovers that amount in full, the EU’s Competition Commissioner Margrethe Vestager told CNBC,” Silvia Amaro and Natasha Turak report for CNBC.

“The EU took Ireland to the European Court of Justice last October for failure to recover the sum from the technology giant, when it was ruled that Apple had benefited from illegal tax benefits in Ireland in August 2016,” Amaro and Turak report. “According to EU law, the recovery of funds should usually take four months after the Commission issued its decision.”

“Apple in 2016 was ordered to pay Ireland the record-breaking sum after a ruling by the European Commission concluded that the country granted undue tax benefits to Apple,” Amaro and Turak report. “In 2016, Apple CEO Tim Cook said the EU’s decision would harm future investment decisions in Europe.”

“Ireland’s low corporate tax rate of 12.5 percent has been a major point of attraction for multinational investors, who have flocked to the country in their thousands,” Amaro and Turak report. “Nearly two years after the commission’s decision, the money in unpaid taxes has yet to be transferred.”

Read more in the full article here.

MacDailyNews Take: So-called unpaid taxes.

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

SEE ALSO:
Ireland expects final disputed Apple bill remaining around $16 billion – February 22, 2018
EU court rejects U.S. government intervention in Apple’s Irish $15 billion tax case – December 15, 2017
EU sues Ireland over $15.3 billion tax clawback from Apple – October 4, 2017
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

22 Comments

  1. Wow, take a look at this quote from the article ” “It’s a question of the level playing field,” Vestager said.”

    A level playing field, boy is that ever a threat to Apple’s home nation. I’m sure the usual redundant derogatory comments will continue to flow from those from Apple’s home nation but what do you expect from a country that embrace torture and terrorism.

    Not up to their game though, that “Margrethe Vestager is a fool who’s in way over her head.” comment hasn’t been used redundantly for a while but I’m sure it will come around.

  2. MDN:

    No, not everyone who decides to setup a business in the EU is insane. The only insanity is being a company who actively worked with another country to receive a tax benefit that was special and illegal. A benefit that was against the laws of the European Union.

    Apple and its counsel knew or ought to have known what it was doing, and this applies to Ireland.

    This is a good ruling: nobody should get special treatment… we’re all equal under tax law.

    1. From what I’ve read, Apple did not get special treatment. They got the same treatment as every other company in Ireland. Kinda undermines your statement that it’s a good ruling.

      1. Then you have not read the facts of the case. Apple took all retail proceeds from all its EU stores and reported them through Ireland. Ireland for years has used a near zero tax rate to lure tech companies like Apple and Microsoft to set up shop in the emerald isle. Apple also employed the double Dutch money laundering scheme to hide its profits. Problem is, all other businesses in Ireland and the greater EU have been shouldering the costs of society while the chosen few companies hoard cash in the Jersey Islands.

        The EU is absolutely just in their actions to claw back the illegal special arrangement that corrupt Irish officials struck with Apple.

        And Americans still wonder why their main streets have withered to nothing. Small businesses don’t have a chance when your “representatives” only represent big corporations and pass the bills to you and me. The trumpist answer of course is to just not pay any bills. What could go wrong by adding $1.7 trillion onto the federal debt?

        1. Yes, and EU rules recognize reciprocity amongst its members, allowing companies to pay the taxes due in the EU country it is domiciled. The EU’s problem is that it allows different tax regimes amongst its members, so that any company looking to do business there will obviously set up shop in the country with the most attractive set of rules, including infrastructure, and tax rates, etc.

          If the EU is so just, why did they calculate the clawback in taxes resulting in two possible outcomes, arguing that both are correct. One is about 13B euros, and the other about 1B euros. They can’t both be right, but that’s what they did, argued that both are right. Most would consider that undermining their own argument.

          Apple didn’t “hide” its profit, it’s all right there on the income statement. The question is where those taxes truly should be paid. Most tax experts would say where that income is created. There’s already sales tax on sales. The IP that went into the iPhone, etc., was created in California, so most tax experts would say that the majority of tax should be US tax. Interestingly, that’s where most of the tax is going to go.

          If one waits, I’d wager that in a year or two, this EU ruling will be reversed or amended at a much, much lower figure.

    2. dswe (aka anonymous coward),

      I fully agree with your last sentence – which is why the EU should back off. EVERYONE was treated equally under Eire’s tax laws, including Apple. The EU can’t just up and decide that tax incentives, legal under Irish law, cannot be offered to certain companies simply because other companies decided not to fulfill the legal conditions of those incentives.

      Somehow I don’t think that those in the countries of the EU thought that they were voting to have a supranational government which could at its whim and without appeal override the laws of its member countries in a discriminatory fashion.

      I predict that more “Brexit” events are in the EU’s future.

      1. You bring up a good point. Do we know if the legal conditions of those incentives were feasibly achievable by other companies and not specifically designed to apply primarily to Apple?

          1. Fair enough. Then I suspect that should Apple’s case go well for the EU, a precedent will be set and new suits will follow targeting the other companies that benefited from the same law.

            1. If the EU and Ireland want to change the rules going forward that’s one thing, To make them retroactive is something else – a cash grab from a deep-pocketed company(s). But yes I agree what’s good for the golden goose is good for the gander should it go that way.

    3. The basis of your argument is completely flawed. Not to mention inaccurate since Ireland treated all similar companies the same way. Try to bone up on the facts before presenting specious opinions signifying nothing. Thanks!

      “Any multinational attracted into Ireland that was focusing on the export market paid zero percent corporation tax,” said Barry O’Leary, CEO of IDA Ireland, which is charged with attracting investment into Ireland.”

      “Ireland has also added that the EU is trying to “rewrite the Irish corporation tax rules”, which as Engadget points out, are the same rules that have led companies like Microsoft, Google, Facebook, LinkedIn, Amazon and more to set up European Head Quarters in Ireland.”

    4. Totally agree with you d, Apple must have known what they were doing in collusion with the Irish government. I have looked into this rather than just go by what I see on sites such as this such as the bbc, npr, cnn etc.

  3. Hey Tim Cook… if you’re looking to take political stands on behalf of your company, this would be the time. Unfortunately, these leftist, big-government thieves are typically the types that you align yourself with so I’m sure you’ll stick to the kinds of political issues that matter most to your company and shareholders- gay marriage, transgender equality and the like.

  4. The funny thing is, is that most of what the EU complains about, a low tax rate of 0.05% is fictitious. It’s calculated as if Apple’s deferred US taxes were never going to be paid. Apple had set aside about $35B in repatriation taxes over the years, but the EU’s case pretended that was essentially zero. Strangely enough, now that US tax reform has been passed and Apple has publicly announced it will pay $38B in repatriation taxes, the EU case and salacious headline tax rates have been weakened, since obviously Apple has now paid alot more than 0.05% in taxes.

    Anything the EU may get Ireland to take back, will be money the US Treasury will have to give to them, since Apple will likely have already paid it. Or, if Apple has to put that money into escrow, then that’s money that Apple will get a credit for from the US Treasury.

    This case has always been about WHO gets the taxes, not that Apple didn’t pay enough. It got confusing only because there’s a delay in when Apple generates income internationally, and when it has to pay the tax. Still, if one looked, one would have seen that Apple had already booked the tax. That’s why when Apple pays the $38B, there won’t be a big $38B drop in income. It’s already been taken out. We’ve seen in the last quarter some companies have had big drops in income because they hadn’t taken the income out, like Google, which had to pay $9.8B, that they hadn’t accounted for, or Microsoft which had to pay $13.8B that they hadn’t accounted for. Those billions were padding their income every quarter for years. Now that they have to pay the tax bill, that they should have been accounting for all these quarters and years, do you think their stock price paid a penalty for fluffing up their earnings? Nope. Did companies like Apple who had been taking out income, $35B worth, to set aside for taxes, get rewarded by the market for doing the correct thing? Nope. That’s 10 cents or 50 cents per share that could have boosted Apple’s earnings each and every quarter, blowing away analyst’s expectations, but they didn’t do it, unlike Google and Microsoft. Did they get rewarded for being honest? Nope.

  5. Look, I like Apple hardware, but if you are pretending that Apple is being honest with its tax dealings, you are being intellectually dishonest with yourselves.

    Proof:

    http://www.finfacts.ie/Irish_finance_news/articleDetail.php?How-Apple-found-a-bigger-tax-loophole-than-the-Double-Irish-681

    Cook lied through his teeth that Apple doesn’t use tax gimmicks that individual taxpayers cannot possibly have. This shows how corporations like Apple avoid taxation while small high street shops are burdened with stuff taxation at every turn. Apple is doing the wrong thing. Both the EU and the US governments are wise to enforce more fair taxation rules.

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