Mike Daisey is still ignorant, isn’t he?

But because they had pulled the Double Irish, the European commission has ruled, Apple deprived the EU of $14.5bn over the last 10 years. The EU ordered Apple to pay the taxes with interest at the end of August, a decision whose logic the company refutes.

The EU’s not been deprived of anything. The tax is not an EU tax, the revenue does not go to the EU. And the EU hasn’t ordered Apple to pay anything. It has ordered the Irish government to repay what the US says is illegal state aid.

21 thoughts on “Mike Daisey is still ignorant, isn’t he?”

  1. Afraid this is not correct. The EU Commission has ordered Ireland to collect billions in back tax from Apple, saying that failure to do so in previous years was tantamount to illegal state aid.

    However Apple will be able to credit the cost of this against its US tax bill if/when it brings the cash onshore, which is why the Feds are furious.

  2. EITN

    That’s my understanding as well. Apple could now repatriate large sums to the US if it so wished and pay no tax in the US by off-setting the tax paid in Ireland.

    The crazy thing is the criticism of Apple as if they are at fault. The agreement was with the democratically elected government of a large western country. IF there was state aid, it’s the Irish Government at fault. Why aren’t SJW morons calling for a boycott of Ireland?

  3. If it has been refuted – evidence has been provided to show it to be false- then game over, story done, all finished, nothing to see here, everything finished, stop banging on about it, shut TF up.

  4. I’m Irish and very confused by all this.

    1) The EU has also said that some of the 13 billion could be claimed by other EU countries. So how they can order Ireland to get it all from Apple mystifies me.

    2) The EU numbers make no sense to me in light of the fact that Apple paid tax in each country on its profits there. (See http://www.bbc.com/news/world-europe-37294260 where we read “equivalent to a rate of 0.05% – this fell to 0.005% by 2014 as profits rose”). Are they being dishonest – even within the assumptions of their own argument – by not including the tax Apple paid in each country ?

  5. Paul Power, I’m sure someone will jump in to correct me, but the 0.005% tax rate revolves around the cash stockpiling offshore (so tax is deferred) and the the function of Apple’s Irish office. The previous understanding was that it only managed logistics and invoicing, and was paid on costs, which are not large. The main sales revenue (very large) was treated separately.

    The EU is challenging that separation,or rather, whether Ireland is allowed to agree to it.

    The bit about some of the tax actually being due elsewhere is probably a rather weak acknowledgment that the outcome of this challenge will affect similar agreements in other states, which in turn may change the taxable amount in Ireland.

    Lols all round.

  6. If one should refuse to do business with an organisation unless one approves of its tax arrangments, should we all refuse to donate anything to Oxfam, Cafod and the British Heart Foundation?

  7. “Why aren’t SJW morons calling for a boycott of Ireland?”

    Because in SJW world hatred of America and all things American is the basis of everything they do. Everything else is just a proxy for that. Apple is evil, because its American. Ergo hate on Apple, regardless of the facts.

    I mean this case is hardly the best example of egregious multinational profit shifting, given that Apple actually sell a physical product and as such everyone pretty much agrees the value is created in the US (and China for the manufacturing). The value created at the point of sale is actually pretty low, so those countries shouldn’t really expect much out of Apple anyway.

  8. “The agreement was with the democratically elected government of a large western country.”

    Well, no. If Ireland was a ‘large’ western country this wouldn’t be an issue. But because they are an insignificant western country with no power the EU pisses all over them.

  9. Thanks NielR, my confusion is lessened.

    Is this correct: what the EU seems to be doing to calculate its “effective tax rate”, is to take the money in Ireland (which I’ll call AMT) and use the tax paid in Ireland as if it’s the tax on AMT, ignoring that AMT is what is left after tax was already paid in other countries.

    So AMT = sum of after tax profit in various countries.

    The profit in a country is something like (sales – costs) where costs = sum of transfer prices + total local costs + tax on profit.

    Apple’s tax in the US would be the tax on profit from sales activity in the US plus tax on the profit on the transfer price – if the US were like ever other country. But the US will also tax the AMT (uniquely among OECD countries I believe). This leads Apple to stash the money in Ireland as it becomes taxable only when brought into the US.

    That’s what I think is happening. But I’m a confused Irishman with 19 billion euro being waved under my nose, like a man who went to an ATM to withdraw 20 euro and was given 2000 euro instead.

  10. Andrew C said:
    “Apple could now repatriate large sums to the US if it so wished and pay no tax in the US by off-setting the tax paid in Ireland.”

    Not exactly; even if they pay full Irish tax, that’s only 12.5%. US tax is, what, 35%? So there would still be a 22.5% charge to pay a dividend to the US parent.

  11. Bloke in North Dorset

    I suppose if Ireland had received that money it would have needed less of a bailout and less regional aid and could possibly make a higher contribution to the EU, especially after Brexit.

    However, those numbers would likely be SQRT(f**k all) and lost in the noise.

  12. Mike Daisey is still ignorant, isn’t he?

    “Apple deprived the EU of $14.5bn over the last 10 years.”

    The EU’s not been deprived of anything.

    Actually, I think Mike Daisy is quite clear. The “United States of Europe” has indeed been deprived of this sum, which will otherwise ultimately end up in USA coffers.

    At least, that’s the USE’s clear future intention…

  13. To get the last sentence right: The EU has ordered Ireland to impose and collect 13 billion of Irish taxes whose non-imposition the EU deems to be illegal state aid.

    [And that is 13 billion of tax credits that the US will have to allow against future US tax on any repatriated earnings, when they thought that they would get to tax it all].

    @Paul Power: Apple’s EU taxable profits fall into 2 broad categories: (i) The profits it makes in each European country (including Ireland) on its in-store sales (after deducting royalty payments paid to Ireland), and (ii) income from internet sales and the aforementioned royalty payments which get paid to Apple Ireland and drop into the Double Irish structure, ending up in an Irish registered company that is managed and controlled outside Ireland and hence not taxable in Ireland under Irish laws.

    Apple Ireland pays Irish tax at 12.5% on the profits arising in Ireland under (i), but it doesn’t pay any Irish tax on the profits under (ii). The EU arrives at its derisory tax rate by dividing the Irish tax paid on the Irish profits in (i) by the (much larger) total Irish profits in (i) and (ii).

  14. So regardless of national tax laws and international agreements regarding matters a company can retrospectively have its tax affairs decided by some other body in a different country even when it has been tax compliant with the relevant tax laws all along?

    Can anyone suggest a place to set up a business that avoids such matters?

  15. “Can anyone suggest a place to set up a business that avoids such matters?”

    Yes, the UK. Brexit is looking more and more of good idea isn’t it? I reckon the best thing to do with regards to the single market etc is stuff the EU’s mouths with gold – let them have our money, but tie the contribution to our GDP at the point of leaving. We’ll be making out like bandits within years if they keep up this war on businesses within the EU. Whatever we pay for access we’d make back many times over. We’ll be like a sort of Hong Kong off Europe, but with a democratic system of government and stable legal system.

  16. Andrew – Why aren’t SJW morons calling for a boycott of Ireland?

    That question answers itself, doesn’t it?

    Jim – We’ll be like a sort of Hong Kong off Europe, but with a democratic system of government and stable legal system.

    Hong Kong had those as well, if you’ll recall. Some of us thought it was a bad idea to transfer sovereignty back to the kleptocrats on the mainland in 1997.

  17. @Martin “So regardless of national tax laws and international agreements regarding matters a company can retrospectively have its tax affairs decided by some other body in a different country even when it has been tax compliant with the relevant tax laws all along?”

    We shall see, but it wouldn’t surprise me at all if this is reversed in the ECJ. The EU is perfectly within its rights to claim that behaviour has been amti-competitive and impose penalties at any time, but whether it can do it by saying that competition law applies taxes has yet to be established. The Irish government cannot simply claim the tax off the tax payer without retrospective changes in the law which would probably have to be specific to a single tax payer and thus illegal under the EHCR and modern practice. It also implies that the state has the right to tax everything and the only reason a tax payer can keep any profit is because of the generosity of the state in allowing them to do so, which makes it very hard to create a legal basis for applying the ruling to Apple but not every other tax paing company in the EU.

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