Originally published at: http://boingboing.net/2016/08/30/apple-told-to-pay-e13bn-in-bac.html
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Note the judgement is really against Ireland. With Britain on its way out, the tax-dodging front is currently in disarray, and Ireland is the weakest of the lot because it desperately needs an amicable solution for Brexit.
2017 is an election year in both Germany and France, and centre-left parties in both countries have to rebuild their leftist credentials after a decade of selling out (which is also why TTIP is dead in the water, or frozen until 2018 at the very least). This is an easy battle: on one side an opulent multinational selling mostly to rich people, and a tax-dumping black-sheep country known for financial mismanagement of their “wild instincts”; on the other, cash-strapped countries with stalling economies itching for substantial public investment. It’s a slam dunk.
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If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business – you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet
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It seems like they’re waking up to that fact, finally.
Still, at 5 cents to every thousand dollars, Apple’s going to holler like they’ve been mortally wounded.
Edit: If they wind up paying.
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At some level isn’t Ireland actually the big winner here? They managed to induce Apple to structure their profits in Ireland with extra special low tax rates, and then, after the European court rules that illegal, retroactively tax them at the regular amount. Irrespective of where the sales, manufacturing and management were, the only reason that those profits were in Ireland was because of that “special inducement.” So the net effect is that Ireland will get to tax a large amount of profits at the regular rate that never would have been in Ireland except for those illegally low rates.
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In this case, yes, but that won’t be repeatable.
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If I were Ireland, I’d plow that revenue into renewable, long lived infrastructure.
Or pull a norway and set up an investment trust for the purpose of supporting social services.
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Unfortunately not.
Ireland will not be allowed to win from this.
I strongly suspect that any money recovered will flow straight to the French and German banks who gambled on the Irish property bubble.
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Ireland, not sure. The Irish, sure not. See this bit in the article
[QUOTE]
The EC said the treatment endorsed a way to establish the taxable profits for two Irish incorporated companies of the Apple group (Apple Sales International and Apple Operations Europe), which did not correspond to economic reality: almost all sales profits recorded by the two companies were internally attributed to a ‘head office’.
"The Commission’s assessment showed that these ‘head offices’ existed only on paper and could not have generated such profits.
[/QUOTE]
No, Ireland didnt attract anything that could be considered good for the individual Irish people that are unemployed.
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Wow. Couldn’t begin to imagine the fallout if a decision like this happened in the US.
Meanwhile, I should figure out how to incorporate myself. The I’ll use Trump-style appraisal valuation to bill my brand as something worth billions. That’ll get the state governments competing for me to base my headquarters in their domain by offering me fantastic tax breaks, rebates, and low-interest loans. Step 3: profit.
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Only in the very short term. €13b is a lot of cash in everyday terms but for a country like Ireland it is not really going to be a significant windfall. On the other hand the ruling potentially undermines their whole reputable, European, tax haven business model which could very negative in the longer term…
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Ireland isn’t happy about this, though, and are fighting it. As @zetetic says, they most definitely don’t want their image as a safe haven for business seen as a trap.
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By a decision against the Government of Ireland?
Ireland is now tasked with recovering money it is not owed. Apple is not on the hook here. Please read carefully.
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…That’s kind of my point. In this day and age, profit structuring is such that the profits appear in the lowest tax jurisdiction. Sometimes this is done with IP licensing schemes but it rarely involves moving much business or wages into the low-tax jurisdiction. It’s possible that these sorts of shenanigans will save “the city” as a financial centre. They may be able to get by with a few mid-level executives moving into the EU to oversee clearing operations while the bulk of the decision making employees stay in London.
safe **tax** haven for businesses
FTFY
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This paints a rather ignorant view of Ireland, which despite the financial crisis is a very successful modern country thank you very much.
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Nope.
a) Ireland have pretty much paid back all the debt that was incurred after the crisis.
b) The repayment structure for the rest has been already agreed.
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pretty sure that says “up to 13B.” i’ll be surprised if apple pays anywhere near that, especially with Ireland’s government on their side.
I’m just telling you how it will look to the general public outside of Ireland. A substantial part of that “successful country” was built on being an EU onshore tax haven; this is the bill for that, and all considered, it’s very low.
