Apple's potential tax bill in Ireland

RandallFlagg

Ireland should recover up to €13bn (£11bn) from Apple in back taxes, the European Commission has ruled.

I bet Apple's legal partners are rubbing their hands, they will make a shed load from Apple defending this.

ESchap

Rather brings Osborne's marvellous settlements with the Globals back in the spotlight and how pathetically shit he was at securing a good deal for UK PLC>.

TonyR

Not really sure how this is guitar related - it perhaps ought to be moved to "Off Topic"? 

RandallFlagg

TonyR said:

Not really sure how this is guitar related - it perhaps ought to be moved to "Off Topic"? 

My mistake, fixed

Rocker

Don't understand how the figure was computed. @Evilmags please explain.

TheMarlin

My bet is their legal guys will find a way to pay a fraction of that. 

joeyowen

Pay a fraction over many many many years

Evilmags

Rocker said:

Don't understand how the figure was computed. @Evilmags please explain.

From what I´ve read Apple have paid 1% of attributable profits in tax to the Irish government (with the explicit agreement of the Irish government, who will anyway earn massive revenues from all of the income tax of Apple Ireland´s employees) Big EU states, such as France and Italy, which have very high tax rates for corporations, get very upset when US firms locate to Ireland (bringing Ireland jobs and prosperity).Ireland have been doing this since about 1992 an the results of their policy have been very successful. 

Evilmags

The number will include interest, so you would take the tax owed for each year. (11.5% of attributable profits) and get its present value using interest rate forward value equations (Present value = Past value X (1+ interest rate)^year) and then su them. 

rossyamaha

Talking to one of my Irish dealers this morning about this. Apparently Apple have only paid about 50 Euros in tax per million turnover for however long. 

webrthomson

I personally find it astonishing that Apple can even be bothered to evade tax when the rate is 12.5% - if the government offered me a rate of 12.5% I would be whistling a jonty tune as I looked for my cheque book

Needless to say the adverse press will not stop the iSheep from wanting the latest slave labour produced iThing.

eSully

My understanding is the 12.5% was on profits made in Ireland only. So they paid normal Corp tax on that (Which is lower than the rest of Europe anyway). Profit made in other countries in the EU (and possibly around the world) were pushed through a virtual head office (no staff, no premises) and somehow they were not obliged by the Irish Government to pay tax on that non Irish profit that was pushed through this virtual Irish head office. This meant an effective tax rate on EU based earnings ranging from 1% when the system was set up to 0.005% in 2014. Hence 50 euro per million

CabbageCat

I imagine that if Apple had had to pay 12% tax they wouldn't have had that part of their business in Ireland. Lucky lawyers.

Jalapeno

Hope it all gets sorted - I'm heartily sick of the big US companies avoiding paying taxes anywhere (even in the US).  I keep going back to Starbucks vs Costa - the difference in tax paid is a disgrace.

Axe_meister

Funny enough the Irish government is on Apples side

crunchman

Axe_meister said:

Funny enough the Irish government is on Apples side

If the business is based there they employ Irish workers who are no longer on the dole and pay Irish income tax.  They have a lot of other businesses they attract with their tax dealings.  They don't want to risk losing Apple or any of the other businesses.

As long as they are in the EU and have a lower tax rate than other EU countries they can clean up.  Luxembourg do a lot of similar stuff as well.

For the EU to work, there needs to be much greater harmonisation and all nations in the EU need to have the same tax rates. It would end up with much higher tax rates like a lot of continental EU countries and everything would be completely uncompetitive on a world scale.  This is why we are better off out.

As I understand it, one other theoretical advantage of Brexit is that Apple (and other companies) will have to set up some kind of UK office for UK sales (which will pay UK tax)  rather than channel it all through Ireland to avoid tax.  Of course they will try to use other dodges to avoid UK tax - one obvious one that occurs is to claim that they make no profit on UK operations by selling their stuff to the UK branch at an inflated rate so it's the "manufacturing" branch of Apple that makes all the profits.

Roland

Jalapeno said:

Hope it all gets sorted - I'm heartily sick of the big US companies avoiding paying taxes anywhere (even in the US). 

The underlying issue is that nation states' tax regimes aren't suited to modern multinational operations. If VAT were to be payable at physical point of delivery, rather than some theoretical point of sale, then the situation would be very different. 

The quality of Starbucks' coffee is certainly a disgrace

Rocker

Wonder if I changed my name, by deed poll, to Apple, would I get an income tax rate of 0.005%? I could live with that....

Evilmags

Note how they are only going for an Irish based company, rather than one from Luxembourg, country of origin of Jean Claude Junkers and fiscal base of tax avoiders like Guardian media group (amongst many others, but the hypocrisy of that one is a bit special). 

Rocker

Fair point @Evilmags ;

crunchman

Evilmags said:

Note how they are only going for an Irish based company, rather than one from Luxembourg, country of origin of Jean Claude Junkers and fiscal base of tax avoiders like Guardian media group (amongst many others, but the hypocrisy of that one is a bit special). 

I detest Juncker, but to be fair to him, I did read one article earlier that said they are potentially going after Luxembourg as well.