Should Ireland appeal the Apple ruling

[TheBigShort]

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.

For every reckless borrower there was a reckless lender. The difference between the two is that the borrower would tend to take one loan at a time, at infrequent intervals. The lender gave out loan after loan after loan, day after day after day, all day long.

 

[Duke of Marmalade]

Odyssey think about it. Not enough that we have the lowest CT rate in the EU, we let Apple set up two Irish companies, one a shell managed in Bermuda or wherever, and the other the trading company. Reducing the tax rate to nearly zero. And for heaven sake cut this "it's the fault of other tax jurisdictions for leaving the loophole".

Now that is the Wild West of tax havens. I presume we haven't an ounce of sympathy from any of the other members, large or small. And let me get this straight, in whinging about our tax sovereignty are Noonan and Henda claiming we should still be allowed to facilitate .05% tax rate? none of Brussels' damn business.

But sure let's appeal. Tim Cook's wrath would be more harmful to Ireland than that of any EU institution. And I mean that.

 

[Purple]

Odyssey think about it. Not enough that we have the lowest CT rate in the EU, we let Apple set up two Irish companies, one a shell managed in Bermuda or wherever, and the other the trading company. Reducing the tax rate to nearly zero. And for heaven sake cut this "it's the fault of other tax jurisdictions for leaving the loophole".

Anyone can set up any company they like. If Revenue say that the company is not run from Ireland then they cannot avail of our 12.5% tax rate.

Do you think an American company conducting business in India should be taxed in Ireland?

Now that is the Wild West of tax havens. I presume we haven't an ounce of sympathy from any of the other members, large or small. And let me get this straight, in whinging about our tax sovereignty are Noonan and Henda claiming we should still be allowed to facilitate .05% tax rate? none of Brussels' damn business.

I presume the City of London, the world’s oldest and biggest tax haven, is keeping its collective heads down. I presume Luxembourg is also keeping schtum.

As for the EU being a fair arbiter of their own rules; remind me again which countries broke the Growth and Stability Pact first and what was done to them. (Hint: the big boys were bad and so just changed to rules to suit them).

But sure let's appeal. Tim Cook's wrath would be more harmful to Ireland than that of any EU institution. And I mean that.

France and Germany getting their way on tax harmonisation certainly would be more harmful than anything Tim Cook could do.

This isn’t about post-colonial inferiority syndrome, it’s about not wanting to be a colony again.

 

[Duke of Marmalade]

Purple

I note your recognition that Revenue have a lot of discretion in deciding how companies are taxed. I think the mainstream defence is that Revenue merely interpret the law of the land.

Ireland has had exemption from the S&G pact seemingly forever.

Oh dear, Ireland becoming a colony, I see you have become a full blown disciple of Mr Master Stroke. Remind me what was the equivalent of Article 50 when we were a colony?

 

[TheBigShort]

But sure let's appeal. Tim Cook's wrath would be more harmful to Ireland than that of any EU institution. And I mean that.

I doubt it. Corporations exist to satisfy shareholders. And they will do as they see fit for their interests, and their interests only, regardless of any appeal or not, regardless if any appeal is successful or not.

Ireland stands to be made complete idiots, if Ireland appeals and wins, there is still nothing to stop Apple up and leaving if they concoct a better deal elsewhere.

Remember, some of this relates to a period where Ireland was bankrupt, the government bank gaurantee helped gaurantee the bank deposits of Apple. In this time, did Apple approach Revenue or the government to see how perhaps they could contribute something a bit closer to 12.5% CT? I doubt it.

We are being taken for fools once more, how often have we heard about our much vaunted 12.5%, only to discover the effective rate is 2-4% for many corporations?
How did our much vaunted 12.5% CT become obscured by the 'Double Irish' or artificial tax avoidance schemes?
How many times do we have to put on the green jersey to bailout multi billion dollar institutions?

This is not a government of the people. It is an extension of international corporate boardrooms that ply their trade by gutting social services (tax avoidance) for their own profit, and gutting social services for their own salvation (bailouts).

 

[odyssey06]

Odyssey think about it. Not enough that we have the lowest CT rate in the EU, we let Apple set up two Irish companies, one a shell managed in Bermuda or wherever, and the other the trading company. Reducing the tax rate to nearly zero. And for heaven sake cut this "it's the fault of other tax jurisdictions for leaving the loophole".

The money is taxable in the US when it is repatriated, either via US corporation tax on Apple profits, or on US equivalent of CGT on Apple dividends.
Can someone explain to me how these profits can be released in value to Apple shareholders without one or other of those taxes being paid to the proper US authorities?

If Apple want to make use of the money, and not just sit on a pile of cash, that is.
A Bermudan holding company pays Bermudan taxes, which are deducted from the US tax liability on the funds - when repatriated.
It is not Ireland's fault that the US sets no deadline on the repatriation. The US politicians kicking up a fuss about the case would be better served by addressing themselves to that than criticising Apple, Ireland or even the EU. Piles of cash have a way of attracting attention.
It's not just Apple. There are $2.1 trillion dollars sitting out there awaiting repatriation by the top 500 US companies.

As far as I know, the only thing that happened in the EU was that the devices were sold there. They weren't developed or built in the EU. Apple is paying tax on its economic activity (6000 staff) here, and should pay the 12.5% on that - but the real economic activity triggering the 13 billion tax liability happened outside the EU and should be taxed outside the EU. If any EU member state has a problem with it, jack up the sales tax on electronics.

 

[Duke of Marmalade]

Bigshort I nearly give you a Like after reading the first part of your post. What would you give for a Like from the duke?
Then you regressed to your signature leftie rant. But getting back to the earlier reasonable part of your post. Clearly the government disagree. They are willing to risk the wrath of every other EU country and institution not to mention 13/19bn rather than offend Tim Cook's sensibilities and they are probably right. So who is colonising us? the EU or Tim Cook.

On that 13/19bn forget the 20 hospitals, that is a new car for every household in the country.

 

[Sophrosyne]

sophie
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.

What does that mean though?
Is the commissioner suggesting that the Irish revenue should dictate where a multi-national should allocate its profits or tax them when they are clearly out of Ireland's jurisdiction?

 

[TheBigShort]

but the real economic activity triggering the 13 billion tax liability happened outside the EU and should be taxed outside the EU.

But where exactly? Apple havent given an answer to that.
And if the Cork plant also represents real economic activity. It cant be dismissed.

 

[odyssey06]

But where exactly? Apple havent given an answer to that.
And if the Cork plant also represents real economic activity. It cant be dismissed.

Well apple employs 66000 employees in the US. Not dismissing its Ireland operations but that's ten times the number employed in Ireland. Their global workforce is 100000, but most of their overseas staff are in retail stores not RnD.
Seems like the majority of the tax should be liable in the US and it must be the US if they want to release those profits back to their shareholders at some point?

 

[TheBigShort]

Can someone explain to me how these profits can be released in value to Apple shareholders without one or other of those taxes being paid to the proper US authorities?

The profits arent released as dividends to shareholders. They are held on balance by the company boosting its capital reserve and subsequently its share price.

If the profits are liable for taxation in the US then fine, Apple just has to declare that. But it chooses not to. Instead it chooses to opt for an elaborate tax avoidance scheme.

 

[Firefly]

A consequence of all this, should Ireland be "forced" to take the filthy lucre from Apple, would be pressure on the US to change its own tax laws and force US companies to repatriate more of their earnings home for tax purposes.

 

[odyssey06]

The profits arent released as dividends to shareholders. They are held on balance by the company boosting its capital reserve and subsequently its share price. If the profits are liable for taxation in the US then fine, Apple just has to declare that. But it chooses not to. Instead it chooses to opt for an elaborate tax avoidance scheme.

I would be in favour of any pressure the US or Ireland can apply to get that money declared... but slight disagreement... it's not avoidance... it's deferral... at some point the money has to come back to the US otherwise its value as a reserve is useless for share price. If Apple's share price is higher than it would be because of it, then the US treasury is benefitting in terms of taxes on sales of Apple shares by shareholders taking advantage of the higher share price.

 

[odyssey06]

A consequence of all this, should Ireland be "forced" to take the filthy lucre from Apple, would be pressure on the US to change its own tax laws and force US companies to repatriate more of their earnings home for tax purposes.

I would rather see than done in terms of something agreed "going forwards" between the US and EU.
I think that the retrospective nature of the EU ruling is very concerning.

 

[Firefly]

Remember, some of this relates to a period where Ireland was bankrupt, the government bank gaurantee helped gaurantee the bank deposits of Apple. In this time, did Apple approach Revenue or the government to see how perhaps they could contribute something a bit closer to 12.5% CT? I doubt it.

We are being taken for fools once more, how often have we heard about our much vaunted 12.5%, only to discover the effective rate is 2-4% for many corporations?
How did our much vaunted 12.5% CT become obscured by the 'Double Irish' or artificial tax avoidance schemes?
How many times do we have to put on the green jersey to bailout multi billion dollar institutions?

This is not a government of the people. It is an extension of international corporate boardrooms that ply their trade by gutting social services (tax avoidance) for their own profit, and gutting social services for their own salvation (bailouts).

I blame the civil servants in Revenue who approved these "deals"

 

[Protocol]

The profits arent released as dividends to shareholders. They are held on balance by the company boosting its capital reserve and subsequently its share price.

If the profits are liable for taxation in the US then fine, Apple just has to declare that. But it chooses not to. Instead it chooses to opt for an elaborate tax avoidance scheme.

These profits are liable to US CT, when repatriated to the USA.

Given the 35% US CTR, the firm don't repatriate the profits, yet.

So ASI/AOE profits will, eventually, be taxed by the US IRS, as it's in the USA where all the work was done to earn the profits.

The work done in the Irish branch is reflected in the share of ASI/AOE profits attributable to the Cork operations.

 

[Duke of Marmalade]

I see your point Protocol. Hard to see 6,000 employees in Cork generating 100bn in profits, that would be 16m per employee.

 

[Firefly]

I see your point Protocol. Hard to see 6,000 employees in Cork generating 100bn in profits, that would be 16m per employee.

We're fierce productive down here I'll have you know boy!

 

[Dan Murray]

....as it's in the USA where all the work was done to earn the profits.

Hard to see 6,000 employees in Cork generating 100bn in profits, that would be 16m per employee.

Above comments imply no "work" or "contribution to profits", respectively, from the non-Irish European-based employees. Maybe you should do HR consulting to Apple if you really believe this?!

 

[Purple]

I see your point Protocol. Hard to see 6,000 employees in Cork generating 100bn in profits, that would be 16m per employee.

That's the whole point of all of this.