Should Ireland appeal the Apple ruling

cremeegg

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The facts as I understand them are.

The European commission has ruled that Apple must pay the Irish Government €13bn in tax.

The Irish government along with Apple had argued that that no taxes were due.

Ireland had a tax regime that allowed Apple pay very low amounts of tax. The commission has ruled that this amounts to unfair state aid, in the amount of €13bn.

The Irish government (and/or Apple) can appeal this ruling. Should it?

Arguments for appealing.

The generous tax regime was put in place to attract companies to Ireland.

The government should defend its policies, and those companies which complied with the Irish law.

We are entitled to set our own tax rates.

Arguments for not appealing.

€13bn

The tax policies amount to an effort to gain unfair competitive advantage over other countries.

Ireland should develop other more durable advantages to bolster its economy rather than rely on an unsustainable tax giveaway.

In my opinion Ireland must appeal, The Government introduced the tax policy it should defend its own actions. Investors will not expect to see Apple abandoned when the existing policy is challenged.

What we need is some really bad lawyers. :D
 

Boyd

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Whatever way you slice it, at 0.005%, Apple paid fifty euro tax on every million they made in 2014. Fifty euro!!! That's scandalous when we are charging citizens 41% up to 50% tax.
 

trasneoir

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Whatever way you slice it, at 0.005%, Apple paid fifty euro tax on every million they made in 2014. Fifty euro!!! That's scandalous when we are charging citizens 41% up to 50% tax.
To split a hair, you're comparing apple's effective tax rate to an individual's marginal tax rate.

More broadly, corporations are not people, so I have no problem with treating them differently. They don't get to vote or collect social welfare, so why should they pay the same taxes? One could argue that it's fairer to tax a company's employees and shareholders (where they actually live) rather than to tax a corporation wherever it notionally lives. It's certainly simpler - corporations can play infinitely complex shell games with their subsidiaries, where as we don't allow people to own other people.

What we need is some really bad lawyers. :D
This is my feeling too. Ireland's money laundry ought to be stopped, but we can't afford for the laundry's customers to flee all at once, so we have to be seen to try to defend them.
 

mathepac

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... They don't get to vote or collect social welfare, so why should they pay the same taxes? ...
Unless they are crooked financial institutions in which case they can cripple the country financially for generations to come and have their debts written off.

Apple and Ireland Inc. struck a legal taxation deal. The EU is trying to make it illegal retrospectively.
 

trasneoir

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Unless they are crooked financial institutions in which case they can cripple the country financially for generations to come and have their debts written off.
I take your point, but governments granting undue influence to companies isn't a problem that taxation will fix.
 

Gerard123

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Heart and head issue here, may be a struggle. Amount of tax involved and also the level of employees, FDI, etc. All factors to consider.

My overriding feeling is that Apple should have been subject to the normal tax arrangements in Ireland (or indeed wherever they operate). Our corporation tax rate is 12.5% and that should have been what they paid. I have no issue with, and indeed we should be offering, generous incentives, etc, to attract FDI. However, I really struggle with a tax rate of 0.005% on their massive profits.

How the tax got from 12.5% to 0.005% is indeed astonishing. Reality is Ireland Inc facilitated them in not paying taxes on massive profits made from consumers in Europe and USA. That is clearly wrong in my mind. They paid (virtually) no taxes anywhere on these profits?

To put it in context that's equivalent to someone on a salary of one million euro paying fifty euro tax. How would people feel about that?

I have no hesitation in saying that part of the reason that our personal taxes are so high is that we are not recouping anything like a fair share from corporations. The dilemma is of course how to take a bigger share without threatening FDI, jobs, investment, etc. Tricky one, but it seems to me that we may have crossed the line of what is acceptable regarding how we dealt with Apple and the tax breaks, and facilitating the non taxing of massive profits.

Should Ireland be getting all of the 13bn? Of course not. Its not our money, it was simply a clever accounting/tax approach to dealing with profits, no head office, no/few employees, etc. Though where it does go is another dilemma.
 

Firefly

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As a line in the sand, our current national debt is:

€ 184,903,776,192

Let's see what our national debt figure rises to before this Apple tax issue is concluded.
 

cremeegg

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Apple and Ireland Inc. struck a legal taxation deal. The EU is trying to make it illegal retrospectively.
I think the commission has said it was illegal from the beginning. That the Irish tax regime was in contravention of EU law.
 

cremeegg

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Should Ireland be getting all of the 13bn? Of course not. Its not our money, it was simply a clever accounting/tax approach to dealing with profits, no head office, no/few employees, etc. Though where it does go is another dilemma.
Interesting point. Apple reported the profits in Ireland and as such they should be taxed in Ireland, at least that is my understanding of it.
 

Gerard123

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Interesting point. Apple reported the profits in Ireland and as such they should be taxed in Ireland, at least that is my understanding of it.
Can understand that logic, however my understanding is that tax is usually follows the substance of transactions (not easy to define though at times, particularly where IT and IP is involved). General tax anti avoidance provisions are typically based on the substance of transactions. Using that approach would suggest that the profits did not accrue in Ireland commercially.
 

Gerard123

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Arguments for appealing.

The generous tax regime was put in place to attract companies to Ireland.

The government should defend its policies, and those companies which complied with the Irish law.

We are entitled to set our own tax rates.
Agree with all of the above with the following caveat re the third comment. We are entitled to set out own tax rate, however we should not be allowed to facilitate the setting up of a structure or mechanism which allows the elimination or reduction of taxes TO SUCH AN EXTENT that they are far from substance and the reality of the situation, etc.
 

cremeegg

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Can understand that logic, however my understanding is that tax is usually follows the substance of transactions (not easy to define though at times, particularly where IT and IP is involved). General tax anti avoidance provisions are typically based on the substance of transactions. Using that approach would suggest that the profits did not accrue in Ireland commercially.
The profits in question were reported for tax purposes as having arisen in Ireland. The intellectual property was owned by Irish registered companies. Whether this is appropriate or not does not seem to be at issue here. As I understand it the ruling does not say that Apple did not obey all relevant tax legislation in Ireland or any other jurisdiction. the ruling says that Irish tax law was in contravention of EU law.
 

PGF2016

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How the tax got from 12.5% to 0.005% is indeed astonishing.
Where is the .005% coming from? I've read that the EU deem all profits outside of America taxable in Ireland (David Mcwilliams I think). Is it fair to say that the Irish arm of Apple is responsible for all profit outside the US? Should some of their profits not be taxed in the jurisdictions where they are generated?

I think the question that pretty much everyone is struggling with is where the profit should be taxed.
 

Boyd

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To split a hair, you're comparing apple's effective tax rate to an individual's marginal tax rate.

More broadly, corporations are not people, so I have no problem with treating them differently. They don't get to vote or collect social welfare, so why should they pay the same taxes?
OK fair enough, apples and oranges there. However, I'd give back my right to vote in the morning in exchange for a 0.005% tax rate. I'd even vote Trump to rule Ireland!!! 0.005% tax, say that out loud a few times......

Obviously I jest above, but our corporation tax is 12.5%, including for all of Apple's direct competitors. Why should Apple pay 0.005% vs 12.5%?
 

Delboy

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More broadly, corporations are not people, so I have no problem with treating them differently. They don't get to vote or collect social welfare, so why should they pay the same taxes?
No, they don't Vote. They have much more power than that!
 

thedaddyman

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I've no doubt someone will appeal this, either the Govt or Apple. However since the €19b is tax based on global sales rather then simply sales in Ireland and if we assume that the "deal" was in effect illegal, does that mean we would owe some or most of that €19b to countries where the tax should have been paid in the first place.???
 

Protocol

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My overriding feeling is that Apple should have been subject to the normal tax arrangements in Ireland (or indeed wherever they operate). Our corporation tax rate is 12.5% and that should have been what they paid. I have no issue with, and indeed we should be offering, generous incentives, etc, to attract FDI. However, I really struggle with a tax rate of 0.005% on their massive profits.

How the tax got from 12.5% to 0.005% is indeed astonishing. Reality is Ireland Inc facilitated them in not paying taxes on massive profits made from consumers in Europe and USA. That is clearly wrong in my mind. They paid (virtually) no taxes anywhere on these profits?

Please note that ASI did pay 12.5% Irish CT, but only on the profits of their Irish branch.

The rest of the profits of ASI are taxable by the USA.
 
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