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Apple Ordered by EU to Repay $14.5 Billion in Irish Tax Breaks

     
11:38 am on Aug 30, 2016 (gmt 0)

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Apple Ordered by EU to Repay $14.5 Billion in Irish Tax Breaks [wsj.com]

The European Union’s antitrust regulator demanded that Ireland recoup roughly €13 billion ($14.5 billion) in taxes from Apple Inc. after ruling that a deal with Dublin allowed the company to avoid almost all corporate tax across the entire bloc for more than a decade—a move that could intensify a feud between the EU and the U.S. over the bloc’s tax probes into American companies.
12:53 pm on Aug 30, 2016 (gmt 0)

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the final cost to Apple will probably be about €19bn because the EU includes interest for unpaid tax going back more than a decade.

Irish finance minister, Michael Noonan, said he would seek approval from the Irish Cabinet to appeal the EU Commission's ruling to European courts. "It is important that we send a strong message that Ireland remains an attractive and stable location of choice for long-term substantive investment,'' Noonan said.


The Irish government would rather spend tax payers money fighting against a $14.5 Billion windfall

Based on a population of 4,595,000, that's about €2,800 each

EU Competition Commissioner Margrethe Vestager says that in one year Apple paid just €50 per million made in profits. "This selective tax treatment of Apple in Ireland is illegal under EU rules," she says.
7:19 pm on Aug 30, 2016 (gmt 0)

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The reason the Irish government has allowed the low rate of tax is simple, Apple provides jobs and investment into the Irish economy.

Based on a population of 4,595,000, that's about €2,800 each


Who knows, the jobs and inward investment may well be worth much more than 2,800 each.

That aside, I don't agree with the Irish government. They are facilitating mega corporations paying almost no tax which is morally wrong.
8:52 pm on Aug 30, 2016 (gmt 0)

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I don't agree with the Irish government. They are facilitating mega corporations paying almost no tax which is morally wrong

I fully agree. Personally I believe Ireland has behaved reprehensibly in being a "little too clever by half".

Ireland has managed to unduly influence corporate taxation rates around the world - reducing them down to the lowest common denominator. This has unduly impacted economies world wide.

Reports in Australia claim "Ireland doesn't want the money".

Well the EU should fine Ireland the sums recovered plus a punitive penalty.
8:52 pm on Aug 30, 2016 (gmt 0)

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The reason the Irish government has allowed the low rate of tax is simple, Apple provides jobs and investment into the Irish economy.


you can have taxes or you can have jobs.... but you can't have both.

apple has created 5,000 jobs in Ireland,

If 5,000 jobs in Cork came at the price of €13 billion, than each job cost the European tax payer €2,6 Million

it's not a good deal.


€13 billion would pay for Ireland's health care budget for an entire year.
8:55 pm on Aug 30, 2016 (gmt 0)

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"It is important that we send a strong message that Ireland remains an attractive and stable location of choice for long-term substantive investment,'' Noonan said.

To me they are simply code words for:

"We are just another scum tax haven".
4:37 am on Aug 31, 2016 (gmt 0)

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FB will likely be next.
6:52 am on Aug 31, 2016 (gmt 0)

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Amazon... [almost endless list]
7:54 am on Aug 31, 2016 (gmt 0)

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Amazon has already been put to scrutiny in the US concerning taxes (not that they won't be again) but FB servers are in Ireland and they list headquarters there for much the same reasons as Apple (I assume.)

This is a European Union move to recover what they view as Apple's owed taxes hidden by insider deals by the Irish gov't . FB may well fit that description.
11:51 am on Aug 31, 2016 (gmt 0)

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It is the EU trying to pursue a federalist agenda and get Ireland to bail out Germany like it did with the banking crisis. The eurocrats in Brussels don't like the idea of national sovereignty and want all of Europe to be ruled Politburo-style by a bunch of unelected bureaucrats. Europe is going to take a very sharp turn to the right over the next few years and the Germans aren't at all pleased with Merkel's flooding of the country with bogus refugees. She and her party are in trouble electorally. (This does take the spotlight off the activities of Volkswagen.) France has its own problems and the National Front may well gain even more support and take the presidency in the next election. The Dutch also seem to be moving right with Wilders' party gaining support.

The UK decision to leave the EU (Brexit) was a shock to the eurocrats in Brussels. These people, epitomised by the unelected head of the commission, Juncker (the former prime minister of the tax haven Luxembourg), are despised by many people in the EU. The English vote in the UK swung the referendum in favour of leaving the EU. That was a head shot to Brussels.

This isn't the EU that most countries signed up for and the expansion to the East (driven mainly by Germany) brought in many former former Warsaw Pact countries that did not economically meet the criteria for membership. Even Greece's membership of the common currency, the Euro, was based on fraudulent data.

The Irish government seems to want to appeal this to the EU courts as basically this is the EU overstepping its position and interfering with a sovereign nation. The eurocrats in Brussels have form in this respect in that they have repeatedly ignored the results of democratic referenda in various EU countries. Ireland is the oldest democracy in the EU and the concept of national sovereignty is one thing that the EUnuchs don't like. This is a political move to establish the EU as superior to national governments and move towards a harmonised taxation structure (a single set of tax rates and tax laws) throughout the EU.

The US government doesn't seem pleased with the ruling either.

Regards...jmcc
6:20 am on Sept 1, 2016 (gmt 0)

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The reason the Irish government has allowed the low rate of tax is simple, Apple provides jobs and investment into the Irish economy.


Tech companies' Irish HQs are usually just tax dodges that create a handful of jobs). It appears the main point of Apple's Irish subsidiary was to record sales as made in Ireland that were actually made in other countries:

funnelling sales through a “so-called” head office in Ireland with “no employees, no premises and no real activities,” said commissioner Margrethe Vestager. Its activities consisted solely of occasional board meetings.


[irishtimes.com...]

Even if it did create jobs and investment, that does not prove it is a net benefit rather than corporate welfare with a few jobs as partial compensation.

Even if all the above are true, that is precisely what EU state aid rules are meant to prevent - countries bidding against each other to attract big business. The EU cannot afford to allow tax havens inside the single market, and a crackdown in long overdue.
4:04 pm on Sept 1, 2016 (gmt 0)

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The Irish Times is traditionally an anti-Irish newspaper. (Irish politics is complex.) It will bend over for any empire, British or EU. When the Irish people rightly rejected the Lisbon treaty in a referendum, the staff there were very upset.

Apple did create jobs in Ireland. Thousands of them. And it still employs thousands of people in Ireland. The EU did not exist in 1980. That was when Apple set up its operation in Ireland. The official line is that what Apple did was legal at the time.

And if "unfair" state aid is so illegal, the EU retro-actively legalised Poland's state aid to Dell to move its manufacturing from Ireland to Poland. And the current unelected head of the unelected European Commission, Jean-Claude Juncker was the prime minister of the tax haven of Luxembourg when a whole pile of tax avoision/evasion was facilitated.

[telegraph.co.uk...]

The administration of tax affairs is part of a nation's sovereignty. The EU (very like the old Soviet Union) is trying to grab as much power as possible from the nation states of the EU. This is a problem for the Irish government and people to sort out. The EU and its unelected bureaucrats should follow the suggestion of Michael O'Leary, the CEO of Ryanair.

Regards...jmcc
8:22 am on Sept 2, 2016 (gmt 0)

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And if "unfair" state aid is so illegal, the EU retro-actively legalised Poland's state aid to Dell to move its manufacturing from Ireland to Poland.


link?
12:21 pm on Sept 2, 2016 (gmt 0)

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-- link? --

On January 8, 2009, Dell announced the closure of its manufacturing plant in Limerick, Ireland, with the loss of 1,900 jobs and the transfer of production to its plant in Poland. [en.wikipedia.org...]

Lookie Lookie - Millennium plaza in Warsaw - [en.wikipedia.org...] - look at the image.
12:45 pm on Sept 2, 2016 (gmt 0)

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On January 8, 2009, Dell announced the closure of its manufacturing plant in Limerick, Ireland, with the loss of 1,900 jobs and the transfer of production to its plant in Poland. [en.wikipedia.org...]

Lookie Lookie - Millennium plaza in Warsaw - [en.wikipedia.org...] - look at the image.


Ok i've read this but it looks like Poland are being investigated too

European Union officials said they would investigate a €52.7million aid package the Polish government used to attract Dell away from Ireland
4:55 pm on Sept 2, 2016 (gmt 0)

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what this judgement says is that a government can't say to Company A, "you pay 20% tax" and to Company B, "you pay 0.5% tax"
If Ireland wants to have 15% corporation tax, or 5% or even 0%, all fine and dandy, but it must be applied fairly and equally to every company. Otherwise, yes, it's basically state aid to a few lucky hand-picked companies. Surely you can see how unfair that is?

Apple not surprisingly starts bleating about "jobs are at risk due to this". Well yes Mr Cook, if my small company suddenly doesn't have to pay hardly any tax, guess what, I have extra cash that would allow me to create a job or two. Doesn't make it fair.

Apple absolutely has to pay the same rate of corporate tax that other companies in Ireland, be they Tesco, Dell, AerLingus or Paddy McGinty's Goat Massage Parlor. It's pretty basic stuff.
6:41 pm on Sept 2, 2016 (gmt 0)

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Apple absolutely has to pay the same rate of corporate tax that other companies in Ireland, be they Tesco, Dell, AerLingus or Paddy McGinty's Goat Massage Parlor. It's pretty basic stuff.

"Paddy McGinty's Goat". Now there is a blast from the past - I haven't heard that expression in decades.

Back on topic, I have absolutely no respect for globalised corporations, nor tax haven countries. Tax havens are purely artificial.

Nor do I swallow the politicians mantra of jobs, jobs, jobs. Nor should anybody else.

All too often the jobs created in one location are at the expense of jobs elsewhere. A smoke and mirrors routine.

Of much greater concern, these corporations are of sufficient size they can and actually do dictate terms and policy to governments. The senior over paid executives are nothing more than modern day oligarchs with excessive influence. Influence voters do not have, even at the ballot box.

Corporate tax avoidance means ordinary working people have to make up for the shortfall with higher taxes, and reduced services in their own country. Nothing to be admired about that unless you are the "wrong thinking" type of person.

And another thing all too often overlooked - many corporations are the biggest socialists around with government subsidies in many, many forms. The military/industrial complex is one fine example.
7:06 pm on Sept 2, 2016 (gmt 0)

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The military/industrial complex is one fine example.
Walmart is another. Regardless, you have to look at the cash reserves that Apple has and wonder how they could have that much. It is not just by making their products in China then marking them up 600% rest assured.
8:42 pm on Sept 2, 2016 (gmt 0)

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It is not just by making their products in China then marking them up 600% rest assured.

It is infinitely greater than 600%

My favourite example is an antenna adaptor cable to USB TV/FM receiver. The brand name in America was priced $US 35.00 plus postage. In Australia the same item, even allowing for exchange rates and postage was north of $A 50.00

On eBay? Very same genuine article, yes it was the genuine article, and worked like a charm?

$A 1.09 post paid from China. There are other examples, but that is the most extreme one I can recall. I've spent a great deal of my life in electronics, whether in business or just a hobby.

A friend of mine in a niche electronics manufacturing market found if he purchased his resistors in lots of 10 million per value, the price came down to a ridiculous tiny fraction of a cent each, he would have easily recouped his whole outlay within two years, and had about another 10+ years supply for nothing. As it turned out he onsold much of the stock to fellow businessmen in different electronics niches, not only recouping his original outlay but making a nice net profit on the deal. His 12+ years stock of resistors cost him absolutely nothing.

Funny world.
6:09 pm on Sept 10, 2016 (gmt 0)

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"unelected head of the unelected European Commission"

I read stuff like this a lot about the EU. The commissioners are appointed by the elected governments, one per country. I am not sure how that is undemocratic as poster implies. The head of the commission is nominated by the European Council, made up of the leaders of the countries in the EU. So British Prime Minister etc. This nomination then goes to the EU Parliament, which is elected using PR. So I can't see where the lack of democracy is in this. Far more democratic than a lot of institutions in the UK for instance, like House of Lords. But of course never let the facts get in the way of a good headline.

There is some surrender of sovereignty but that is the nature of every large organisation. Ireland is free to leave the EU, which of course they never will as they have been a huge beneficiary.

As for Ireland, they have been playing this game too long...the idea is to stop the race to the bottom.
 

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