Should Ireland appeal the Apple ruling

[Delboy]

Revenue would have no say in how a company arranges its business affairs.

Perhaps but they could most certainly have a huge influence on Company structures/revenue flows, depending on the tax interpretations provided

 

[TheBigShort]

Is it your opinion that the Commission is non-partisan?

What I am suggesting is that there are a number of opinions offered on both sides the debate concerning the EU Commissions ruling on Apple.
I simply posted one opinion which I considered to be of some interest to the debate.

 

[Gerry Canning]

This whole row is way over my competency but from the threads and my reading I glean these ,I think ?

1. Apple have squirelled away billions tax free but know at some time, said billions will be repatriated to USA.
1a, Apple hold onto said funds in the hope USA tax rate will reduce from 35%.
2. Meantime those pesky Europeans want to grab some billions .
2a, that would reduce USA,s eventual tax take.The USA may have thought Apple and others were a savings fund, for the future, but now Europe wants some of the cake.No wonder USA is crankey.
3. Now means Europe and USA are @ loggerheads.
4. Little old Ireland is the football twix them.
4a. 1991 was a different place, with hindsight the agreement should have been reviewed.

I think we should appeal, for the simple reason ,that its very destabilising to backtrack on views freely honestly given to Apple .In any event the world was so different in 1991.
By all means review taxes and indeed hit with penalties to a degree, but don't create instability, without thinking things through.

(An example of how back taxing on agreements is negative , is the way Government raided pension funds that were clearly understood to be safe , and that had effect of people shying from taking out pensions.)

 

[TheBigShort]

bigshort your leftie hero makes some laudable points I'm sure but on the key issue of selectivity he is off the wall. Your own example of Microsoft could surely afford the same expertise as Apple.

One, he is not my hero. Two, to me the crux of the issue will boil down to, not whether or whether or not Microsoft could afford the same expertise (of course they could) but whether or not Microsoft and others were facilitated by Irish authorities to avoid paying CT tax in this way.
If the facility is available to all corporations then fine, its a loophole that needs to be closed, but Apple should not be liable. But if its a facility only available to select corporations, then there is a problem.

 

[Sophrosyne]

Perhaps but they could most certainly have a huge influence on Company structures/revenue flows, depending on the tax interpretations provided

Revenue give rulings regarding the tax implications of various company actions. But that does not amount to endorsements of those actions. The commissioner has to explain what she means by endorsement.

 

[Purple]

to me the crux of the issue will boil down to, not whether or whether or not Microsoft could afford the same expertise (of course they) but whether or not Microsoft and others were facilitated by Irish authorities to avoid paying CT tax in this way.
If the facility is available to all corporations then fine, its a loophole that needs to be closed, but Apple should not be liable. But if its a facility only available to select corporations, then there is a problem.

Yep, that's my reading of it as well (for what that's worth!).

 

[jim]

isn't this a classic case of short term gain versus long term gain? If we accept the 13b isn't it likely that this would affect our credibility from a tax perspective with other large multinationals and therefore potentially negatively affect future tax revenue? Those other multinationals probably want to see the Irish Gove standing up for their tax regime and therefore appealing the decision.

 

[Duke of Marmalade]

sophie

The Commission's investigation has shown that the tax rulings issued by Ireland endorsed an artificial internal allocation of profits within Apple Sales International and Apple Operations Europe, which has no factual or economic justification.

I think she means endorsed them as appropriate for tax. Of course Apple are free to allocate all their profits to the coffee machine but Revenue endorsement is about taxable profits and that is within their gift to an extent.
Bigshort I totally agree with your last assessment but that leftie chap specifically said Apple had an unfair advantage simply coz they can afford expensive lawyers and accountants. Most MNCs have the same capacity so no way does this select Apple.

 

[TheBigShort]

Bigshort I totally agree with your last assessment but that leftie chap specifically said Apple had an unfair advantage simply coz they can afford expensive lawyers and accountants. Most MNCs have the same capacity so no way does this select Apple.

Perhaps the Microsoft comparison was a poor one to make. But couldn't any software developer arguably be a competitor of Apple?
Similar to how a small b&b is in competition with a large hotel chain. If the large hotel chain can resource the financial expertise to concoct a tax avoidance scheme that meets with Revenue approval then it is a question of whether such a scheme puts them at unfair competitive advantage. The EU Commission is arguing that it does and I would be inclined to agree.
Collette Brown does a good piece in todays Irish Independent. She cites a Limerick company who were found to be in receipt of €10m state aid earlier this year. I dont know the circumstances of this case, I do know it did not register anywhere on the political radar. I certainly don't recall any claims of our sovereignty coming under attack.

 

[Duke of Marmalade]

Bigshort I see where you are coming from. If Ms V is arguing that Apple and similar MNCs had a selective advantage over Fred in the Shed I think that would be a very difficult case to win, after all the "standard" Double Irish was presumably only available to the few usual suspects. And why is there not now a witch hunt against these other takers of the forbidden Apple.

No, to win, her case will surely have to be that it was much more selective than that.

 

[Setanta12]

Tax rulings are open to anyone. The Revenue actually publish summary versions of them to assist other companies - the whole 'is this a trade liable to 12.5%' question on which the Revenue have published maybe about a 100 short summaries.

Being big is not a selective advantage. The same arguments have been put forward for efficiently arranging your tax-affairs; claiming reliefs is not tax-evasion, or incorporating oneself's own business for tax-purposes is not tax-evasion (although it is legitimate tax-avoidance).

To repeat; tax rulings are not State-aid. Closing off other countries' tax-loopholes should not be an Irish duty - we should just look after our own!

 

[Purple]

Similar to how a small b&b is in competition with a large hotel chain. If the large hotel chain can resource the financial expertise to concoct a tax avoidance scheme that meets with Revenue approval then it is a question of whether such a scheme puts them at unfair competitive advantage. The EU Commission is arguing that it does and I would be inclined to agree.

Where I work we compete against companies which are large enough to have a manufacturing base in China and transfer price back into Europe and then sell here at a lower price than we can offer. That gives them a competitive advantage in that regard but if we were big enough the same option would be open to us. In other words their competitive advantage is not based on government policy but issues outside of that. It's the same with the B&B versus the Hotel or Apple versus the little guy down the road.

 

[TheBigShort]

Bigshort I see where you are coming from. If Ms V is arguing that Apple and similar MNCs had a selective advantage over Fred in the Shed I think that would be a very difficult case to win, after all the "standard" Double Irish was presumably only available to the few usual suspects. And why is there not now a witch hunt against these other takers of the forbidden Apple.

No, to win, her case will surely have to be that it was much more selective than that.

Well the reason there isnt the witch hunt, as you say, is perhaps because the arrangements were not afforded to, or facilitated for, other MNC's despite such companies having the financial clout to devise such schemes? Hence, supporting the Commissions view.

I should add to that that there does appear to be serious moves afoot to hunt out facilitators and participators of such artificial tax avoidance schemes on both sides of the Atlantic.

 

[Purple]

Well the reason there isnt the witch hunt, as you say, is perhaps because the arrangements were not afforded to, or facilitated for, other MNC's despite such companies having the financial clout to devise such schemes? Hence, supporting the Commissions view.

Maybe, but if so then I don't think we would be objecting so strongly. Let's face it, they aren't here for our self classified "world class education system".

 

[TheBigShort]

Maybe, but if so then I don't think we would be objecting so strongly. Let's face it, they aren't here for our self classified "world class education system".

But the objections are muddled at best. There is an apparent attack on our sovereignty - this is nonsense.
The objections are loud nationalistic rhetoric designed to obfuscate the issue. I refer to Collette Brownes piece in the Indo today. It gives a reasoned view on what is happening here.

 

[Purple]

The issue for me is that Apple should pay their taxes but not here. They should pay them in America.
I don't see any substance in Colette Browne's opinion piece.

 

[Duke of Marmalade]

Colette Browne's piece is excellent. Yes we should appeal, I think. But this indignant outrage at an attack on our sovereignty is a very dangerous game. I really can't buy into the paranoia narrative. We have been getting it very easy indeed from the EU and that includes the bail out from our reckless folly. We need a reality check here, now is the time to make friends and influence our EU partners, not the time to behave as spoiled brats.

 

[odyssey06]

Colette Browne's piece is excellent. Yes we should appeal, I think. But this indignant outrage at an attack on our sovereignty is a very dangerous game. I really can't buy into the paranoia narrative. We have been getting it very easy indeed from the EU and that includes the bail out from our reckless folly. We need a reality check here, now is the time to make friends and influence our EU partners, not the time to behave as spoiled brats.

This is a fantasy. Time and time again the EU has shown that there is one set of rules for small countries, and one for larger countries. Anyone who thinks Ireland can be a friend of Germany or France must have been living in a different universe for the last 10 years...
Ireland did not get an easy ride in the bailout. Look at what we were put through compared to Spain. There are only 'interests' in EU. If our interests do not align with Germany or France, they will steamroll us unless we stand up for ourselves - and steamroll us they did in 2010. If being a 'good European' got us that kind of treatment in 2010, maybe it's time to not pay any heed to that concept, and to be a 'bad European' from time to time.

If it was up to France, Ireland would not have a 12.5 corporation tax. France would be perfectly happy to reset Ireland back to a primarily agricultural economy - just don't try to sell any Irish produce into their markets and say nothing while they raid our fish stocks.

Look at the different reaction to when France voted against the EU constitution, to when Ireland rejects an EU treaty.
Look at the different treatment meted out to Portugal and Ireland v Spain when it came to bailouts... Was Portugal or Ireland any more or less a 'good European' than Spain? No, the only thing that counted was size and power.

Does anyone really think whether Spain appealed or did not appeal the EU commission ruling against Santander etc made any difference at all to how they were treated in the EU?
http://www.rte.ie/news/2016/0902/813591-santander-apple/

Ireland is fully within its rights as an EU member state to appeal this decision. If exercising our legitimate rights as an EU member state will turn us into "spoiled brats" in the eyes of our EU 'partners', I think you have shown yourself what a fiction the concept of 'friends' is in the EU.

 

[Duke of Marmalade]

odyssey66 ever hear of Article 50? Membership of the EU is entirely voluntary. Strange that even today after all these terrible beatings up by our French/German masters there is not a whisper for Irexit. Same goes for Portugal. And as for Greece, despite the invocations of WWII massacres, the last thing the populace wanted was to be kicked out of this club, supposedly run by their German oppressors.

I understand the sense of cold turkey. Having gotten hooked on bemoaning 800 years of victimisation by our nearest neighbour we badly need a replacement.

But let's get very real here. The EU has been and still is for Ireland "le poule aux oeufs d'or".

 

[odyssey06]

odyssey66 ever hear of Article 50? Membership of the EU is entirely voluntary. Strange that even today after all these terrible beatings up by our French/German masters there is not a whisper for Irexit. Same goes for Portugal. And as for Greece, despite the invocations of WWII massacres, the last thing the populace wanted was to be kicked out of this club, supposedly run by their German oppressors.

I understand the sense of cold turkey. Having gotten hooked on bemoaning 800 years of victimisation by our nearest neighbour we badly need a replacement.

But let's get very real here. The EU has been and still is for Ireland "le poule aux oeufs d'or".

You mean whatever treatment is meted out to an EU member state, if the member state doesn't leave, it must be alright and fair and legitimate treatment and beyond criticism? Even if it means one set of rules for big countries, and one set of rules for small nations? Really?
So if someone in working in a company, no matter badly they are treated, as long as they didn't quit the treatment must have been fair and equitable?
That's the logic of your argument? I hope you never sit on an Employment Tribunal.

If you support Ireland's opposition to an EU decision, it's only because of some post-colonial psychological kneejerk reaction? Not because of the merits of the arguments or Ireland's national interest.
Really? I think you are the one obsessed with oppressors.

Do you think the Spanish press talked of Franco during the Santander case?
I repeat, does anyone really think whether Spain appealed or did not appeal the EU commission ruling against Santander etc made any difference at all to how they were treated in the EU?
If someone can find examples of how small 'good' EU states evaded punishment by virtue of their friends then I'm all ears.

For the act of appealing the decision - which is entirely within our legitimate rights as an EU member state - we would be spoiled brats?
Somehow, I think if other EU member states could think that of Ireland, there is no realistic chance we will ever be their 'friends'. All we can do is fight our corner within the rights we still have in the EU, with due consideration our national interest. Playing the 'good' European game to make friends is not something worthy of consideration in that assessment, as it's been shown time and time again to be a failed strategy.
So let's appeal.