Apple Could Pay 'Total Political Crap' $14 Billion Tax Bill to EU After All

[transmaster]

Apple's original sin is they are Yankee, Cowboy, US based company with money. There are numerous US Tech companies with their EU HQ's in Ireland. Apple has a 6,000 personal work force and pumps billions into the Irish economy making Ireland the 2nd richest country in the EU. US-controlled multinationals are 25 of Ireland's top 50 companies; pay over 80% of all Irish corporate taxes. Directly employ 10% of the Irish labour force which rises to 23% when public sector, agri and finance jobs are excluded, they indirectly pay half of all Irish salary taxes, and are 57% of all non-farm OECD value-add in the Irish economy. In June 2018, the American–Ireland Chamber of Commerce estimated the value of US investment in Ireland was €334 billion, exceeding Irish GDP (€291 billion in 2016).

 

[twocents]

Many Europeans have either lived in a then-communist country or only a few hundred km from the border of one and yet Americans, who basically are on the other side of the planet continue to lecture us as to what communism is. No thanks, we certainly have more experience than you.

So true, also there are the some Americans on the other end of the bell curve, typically college students, who are indoctrinated with a distorted, utopic view of communism as a solution to outstanding systemic societal problems.

I had the reputation on campus as the go-to for troubleshooting Mac and iOS devices and had some interesting conversations on that topic. The international students I knew provided a much needed reality check based on their home countries’ experiences with it throughout the 20th century.

 

[pacalis]

How is the question of enforcing rules trying to tax into innovation?

These rules don't come down from the mountain - they are mostly intended to slow down and undermine US companies operating in Europe. For example, the EU Digital Services Act and Digital Markets Act only effectively applies to large, non-EU companies (except Spotify).

 

[Kierkegaarden]

Apple chose Ireland as the location for certain business operations, and they had an arrangement with Ireland around taxes for those operations. Would they have chosen Ireland if they had known the arrangement would later be invalidated? Absolutely not. Going forward, the arrangement can be modified, but to reach into the past and slap a large tax bill on an arrangement that was preferable to both parties is absurd.

 

[farmboy]

Nah just a egocentric and hypocritical company with a high inclination towards loopholes to circumvent taxes at large scale, and who does everything it can to not contribute to the economic well-being of any country and society, which is usually build on taxes.

You are always a reliable source of just plain weird takes on things.

 

[siddavis]

No one is denying that tax revenues increased. What you are refusing to acknowledge is that they increased less than if there were no tax cuts. Do you not understand that?

Why do you get to state that as fact?
From my initial post you said I could not claim causality - fair, but I am making a historical observation.
Would you rather have 20% of $100 after sticking it to the big bad corporation, or 10% of $300 after making cuts?
One is emotional, the other is logical and actual results bear it out.

 

[robd003]

All Taxation is Theft

 

[BaldiMac]

Why do you get to state that as fact?
From my initial post you said I could not claim causality - fair, but I am making a historical observation.

Sure, but you're "historical observation" implies causality. Otherwise, what's the point of it? You could just as well correlate the increase in tax revenue the number of shells you found on the beach. I provided you with independent analysis of the tax cuts that show that they resulted in decreased revenue.

Let's say banana production increases by 3 bananas every year. You institute a new policy that reduces the increase to 2 bananas per year. Banana production continues to grow!!!! But I have fewer bananas that I would have without the new policy.

Would you rather have 20% of $100 after sticking it to the big bad corporation, or 10% of $300 after making cuts?
One is emotional, the other is logical and actual results bear it out.

Those aren't the choices. In reality it was closer to "Would you rather have 20% of $200 or 15% of $200?" There is no evidence that the tax cuts had a significant impact on economic growth. Tax cuts were passed in 2018. The economy grew slower in 2019.

U.S. GDP Growth Rate 1961-2023

Annual percentage growth rate of GDP at market prices based on constant local currency. Aggregates are based on constant 2010 U.S. dollars. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the...

www.macrotrends.net

Increased spending, however, had a significant impact on growth even with an increase in taxes.

 

[ChrisA]

Here is how you can think of this in US terms.

Here in the US, many times state governments will try to convince a company to build a plant in their state by offering a reduced tax rate. They might say "If you build a car plant and hire 2,000 workers, you don't have to pay property tax for 10 years." This is a gift (bribe?) worth millions of dollars and is perfectly 100% legal in the US. Each state is allowed to make its own laws about property taxes and can do this.

But in Europe, such deals are not legal. The EU complaint is that Ireland gave Apple a "deal" so that it would build in Ireland. If this is true, Apple did nothing wrong but still would be required to pay back the money it illegally got.

It is as if you were gifted a new iPhone and then later the police found out that your friend who gave you the iPhone was a shoplifter who stole the iPhone from a store. You would have to give it back, even if you did nothing wrong. You are not allowed to keep stolen property.

I suspect Ireland makes a lot of these deals with many companies, Apple is just the biggest. That said, you'd need to be an expert in EU law to know if the deals were illegal or actually "loopholes" that are in fact legal.

 

[BaldiMac]

Here is how you can think of this in US terms.

Here in the US, many times state governments will try to convince a company to build a plant in their state by offering a reduced tax rate. They might say "If you build a car plant and hire 2,000 workers, you don't have to pay property tax for 10 years." This is a gift (bribe?) worth millions of dollars and is perfectly 100% legal in the US. Each state is allowed to make its own laws about property taxes and can do this.

But in Europe, such deals are not legal. The EU complaint is that Ireland gave Apple a "deal" so that it would build in Ireland. If this is true, Apple did nothing wrong but still would be required to pay back the money it illegally got.

It is as if you were gifted a new iPhone and then later the police found out that your friend who gave you the iPhone was a shoplifter who stole the iPhone from a store. You would have to give it back, even if you did nothing wrong. You are not allowed to keep stolen property.

I suspect Ireland makes a lot of these deals with many companies, Apple is just the biggest. That said, you'd need to be an expert in EU law to know if the deals were illegal or actually "loopholes" that are in fact legal.

That's not quite right in that Ireland isn't giving Apple a "deal" on their tax rate. What they are doing is allowing Apple (and anyone else) to delay taxes on US revenue by creating a stateless holding company. That's they key point. The revenue in question was never the EU's to tax. It's eventually booked as US revenue and taxes are paid in the US. (Or to a lesser extent to support European operation in which case the taxes are paid in the respective country.)

 

[Duncan-UK]

Thank you for an actual explanation and not just downvoting me.

I realize courts aren't democracies, and maybe this is just a naive American view, but they're supposed to still be accountable to the people in some way. Even the Supreme Court has some form of checks and balances. Maybe it just doesn't work that way there.

It just seemed counter-intuitive to me that it appears this case was decided, appealed, upheld, and now one person decides it should be stricken and a higher court than the first two seems to just go along with that.

It's fair comment and indeed identifies some of the sovereignty problems and democratic deficits that critics of the EU regularly highlight.

Then again, it might well be a good thing given how countries like Ireland and Lux are "inside the tent pissing out" with their blatant tax haven economies!

 

[Wildkraut]

All Taxation is Theft

Then you better stop using all kind of stuff that was build with money that came from taxation, incl. the roads and pavement around you.

Have fun hiking and climbing to work or school, and take care to not screw up your sneakers!

 

[CarAnalogy]

It's fair comment and indeed identifies some of the sovereignty problems and democratic deficits that critics of the EU regularly highlight.

Then again, it might well be a good thing given how countries like Ireland and Lux are "inside the tent pissing out" with their blatant tax haven economies!

Yes this is kind of my thinking. "Tax loopholes" is an interesting phrase. Unless Apple actually broke the law, it seems like this is more Ireland's fault.

 

[NightFox]

No big deal.

They’ll just add an extra 50 bucks on every new iPhone next year.
Instead of 999.00 you’ll see more of 1,049.00 and such prices.

Bottom line: in the end we pay for every one of Apple’s screw-ups. Be it this or anything else.

OK, see my post #88 in this thread

 

[transmaster]

Yes this is kind of my thinking. "Tax loopholes" is an interesting phrase. Unless Apple actually broke the law, it seems like this is more Ireland's fault.

It is, Irish law allows for some sort of dual company setup. Not really sure how it works but one side is based in Ireland the other isn't. Apple negotiated a deal were instead of 2 different companies they have 2 different divisions of the same one. The bottom line Ireland is making out like a bandit on the deal. It is the EU that is pissed because they want a bigger cut of the "apple" (pun intended) and this deal cuts them out of a bunch of loot.

 

[siddavis]

Sure, but you're "historical observation" implies causality. Otherwise, what's the point of it? You could just as well correlate the increase in tax revenue the number of shells you found on the beach. I provided you with independent analysis of the tax cuts that show that they resulted in decreased revenue.

We are told that tax cuts lead to deficits because of lowered tax receipts. All I stated was that tax receipts increased following tax cuts. That's the point of it - to dispel the myth that the government takes in fewer tax dollars following cuts.

Then you do the same thing you accuse me of - stating with certainty that revenue would have been higher without cuts. You say you provided "analysis" showing the cuts resulted (past tense) in decreased revenue. Here's a quote from this analysis, "The Tax Cuts and Jobs Act cut taxes substantially from 2018 through 2025. The resulting deficits will add $1 to $2 trillion to the federal debt, according to official estimates." (emphasis mine). That nonsense was based largely on estimates produced in 2017 - look at the data sources yourself. "JCT projected that the law would reduce revenues by $1.65 trillion from 2018 to 2027." (emphasis mine). Guess what, the same JCT and CBO's latest projection now is not reduced revenues, but increased revenues over that period by $570B! That is after an actual (as in, it actually occurred) increase from $3.32T (2017) to $4.90T (2022).

The Numbers Are In: Trump’s Tax Cuts Paid Off

The Congressional Budget Office’s May 2022 forecast shows that the government now expects to bring in more tax revenue in the decade following the 2017 “Trump tax cuts” than it had projected prior to the December 2017 passage of tax reform.

www.heritage.org

Just because somebody says something will happen doesn't mean that it did. This is precisely the reason I posted my example.

 

[BaldiMac]

We are told that tax cuts lead to deficits because of lowered tax receipts. All I stated was that tax receipts increased following tax cuts. That's the point of it - to dispel the myth that the government takes in fewer tax dollars following cuts.

Except your “myth” is a strawman. No one is arguing that revenue decreased because of the tax cuts. The actual argument is that there is less revenue than there would have been without the tax cuts.

And then you responded to my nonpartisan analysis with a partisan one. Again, appealing to emotion rather than reason. Tax revenues are up because of increased spending, not tax cuts.

Despite your claim, you can’t compare to actual numbers unless you have access to an alternate reality without the cuts.

 

[amartinez1660]

There was a discussion going on in one of the Blender’s Mac M1/2/3 forums… some members were complaining and saying that “Apple is playing you as fools, how come these laptops are €7000!!”.

And here is one of the reasons why, it is at best at least Apple and the EU taking all their citizens for fools.

For context, another user posts his prices in the US, it was close to half of that. Then add that each € is more than $1, so the price gap is even worse if converting and comparing in the same currency.

Anyways, all this to say, to each their own, that’s why we vote and decide, however there are no solutions just trade-offs.
If we want bureaucrats hunting down private companies day and night to see how they can fine them for their world wide revenue at every single misstep? ok cool, but then we pay higher prices on everything in life, can’t have the cake and eat it too.

 

[BaldiMac]

There was a discussion going on in one of the Blender’s Mac M1/2/3 forums… some members were complaining and saying that “Apple is playing you as fools, how come these laptops are €7000!!”.

And here is one of the reasons why, it is at best at least Apple and the EU taking all their citizens for fools.

For context, another user posts his prices in the US, it was close to half of that. Then add that each € is more than $1, so the price gap is even worse if converting and comparing in the same currency.

Anyways, all this to say, to each their own, that’s why we vote and decide, however there are no solutions just trade-offs.
If we want bureaucrats hunting down private companies day and night to see how they can fine them for their world wide revenue at every single misstep? ok cool, but then we pay higher prices on everything in life, can’t have the cake and eat it too.

I don’t know where you are getting any of this. This decision is just about whether the tax is paid to the US or the EU. Apple pays a similar amount either way. As far as different prices in different countries, this is mainly about currency and VAT. Apple doesn’t charge significantly different prices in the US and EU.

 

[bergert]

I am surprised that many people don't understand the fact that Ireland and Apple made a deal, to get neconcurențial business on one side and to avoid taxes on the other side. In a nutshell that is all that is happening here. Apple plays the card of "we didn't know" like not knowing is going to resolve anything.
Let's be honest, we like to make EU the bad guys, which they might be, but Apple is not innocent either. We as a consumer we'll pay the price (just like we pay premium for extra 8 GRAM )

The case is for Apple, but Dell, HP and many others based in Ireland using the same deal and selling to the whole EU. This is like the supreme court in the US would start a case that Delaware coroprations are tax havens: Apple, HP, Dell, Google are all based - for tax reasons - at a Wilmington address.
While ultimately we as consumers will pay these taxes, it’s also not correct that the tax burden on salaries is up to 50% (EU) while Apple enjoys a 2% deal with Ireland. it is a disadvantage for small local businesses in the rest of EU which have to pay much higher taxes.
This case is more about common EU market, and Apple happens to be a very visible corporation.

 

[bergert]

Thank you for an actual explanation and not just downvoting me.

I realize courts aren't democracies, and maybe this is just a naive American view, but they're supposed to still be accountable to the people in some way. Even the Supreme Court has some form of checks and balances. Maybe it just doesn't work that way there.

It just seemed counter-intuitive to me that it appears this case was decided, appealed, upheld, and now one person decides it should be stricken and a higher court than the first two seems to just go along with that.

The supreme court in US has so many checks and balances, …. the are nominated for life, not accountable to anyone, not even a code of conduct or ethics committe. It is in all newspapers…. Clarence Thomas?

 

[norbinhouston]

Yes Apple did away with local backups, for the sake of pushing the iCloud subscription revenue.

There is a reason why Apple gives you 5GB for free and constantly show banners which means in other words: "Hey buddy, your iPhone has not been backup for a while, and sadly your free 5GB iCloud does not have enough space to make a backup". Luckily we have a solution for this, it's called 50GB, 250GB... iCloud subscription, go ahead and subscribe it, we care for your wallet ermm we care for you, of course!"

And no not any USB-C will work, to get faster USB-C transfer speed you need Apple's cable.
Without Apple's USB-C cable you just get a USB 2.0 speed.

WRONG, they did not do away with local backups, they just did away with REQUIRING you to plug into a Mac to start using your iPhone, before that you needed to connect to iTunes. You can still back up to your local computer. And you are free to use ANY USB C cable. So many lies.

 

[CarAnalogy]

The supreme court in US has so many checks and balances, …. the are nominated for life, not accountable to anyone, not even a code of conduct or ethics committe. It is in all newspapers…. Clarence Thomas?

They definitely have the least but that’s supposed to be part of the point. They are supposed to be conservative in the sense of slow and careful to change. Supposed to require a lot of bipartisan support to confirm (supposed to.)

Also Congress (theoretically) can just pass a different law if the Supreme Court calls a particular thing illegal.

 

[mrat93]

All Taxation is Theft

Oh to be a 14 year-old wannabe libertarian again.

 

[sideshowuniqueuser]

I think the issue the EU has is really with Ireland rather than Apple, in that the Irish government went too far in offering an effective subsidy to entice Apple to its shores that was in breach of the EU state aid rules that aim (amongst other things) to stop EU member states competing with one another to bribe companies to base themselves there.

From the linked article it was alleged Ireland offered Apple a deal of 2% tax instead of its normal 12.5% tax.

From Wikipedia that deal would be State Aid - and so potentially illegal - if it met the following criteria:

1. "the use of state resources"
2. "the measure must confer an advantage to a certain undertaking"
3. "the advantage must be selective"
4. "the measure must distort competition"
5. "affect trade between member states".

At a high level if that kind of special tax discount was given it seems pretty clear that Ireland is in the wrong. Perhaps harsh though for Apple to be caught in the crossfire, but from the EU's perspective it was the recipient of the state aid and must now disgorge it.

Ah, logical, calm, rational thought, all succinctly expressed. Top work there playtech1.