Should Ireland appeal the Apple ruling

TheBigShort

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Thank you, much appreciated.
I wasn't doubting your information btw, I was just alarmed at the bare faced nature of tax avoidance that is being shown in those figures.
 

Protocol

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So to who does it owe?
USA.

Well, I'm not so sure.

You see, it wasn't tax resident anywhere.............

It eventually owes CT on the profits to the USA.

But the USA allows a deferred liability until you repatriate.
 
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Sophrosyne

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While not arguing the rights and wrongs of Apple's tax avoidance, our problem is that the EU are using State Aid rules as a back door to attack our taxation policies.

The commissioner stated:

"In fact, the tax treatment in Ireland enabled Apple to avoid taxation on almost all profits generated by sales of Apple products in the entire EU Single Market. This is due to Apple's decision to record all sales in Ireland rather than in the countries where the products were sold. This structure is however outside the remit of EU state aid control.
If other countries were to require Apple to pay more tax on the profits of the two companies over the same period under their national taxation rules, this would reduce the amount to be recovered by Ireland".

Apple
and not the Irish revenue exploited the mismatch between Irish and US tax law.

It was Apple's decision to record all sales in Ireland.

As the commissioner stated, this arrangement is outside the remit of EU State Aid rules and the EU can do nothing about it.

Instead, she is trying to make this Ireland's problem by citing two tax rulings which, she claims "endorsed" Apple's arrangement.

The rulings have not been published, but tax rulings do not endorse business arrangements, they are rather Revenue's opinion as to how Irish tax is to be applied in a given set of circumstances.

As Protocol has repeatedly and correctly stated, the Irish revenue and Irish tax law is only concerned with what is taxable in Ireland. Profits that are or ought to be taxable elsewhere has nothing whatever to do with Ireland.
 

Duke of Marmalade

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sophie the issue is was Apple's ruling selective. As I understand Seamus Coffey, if the arrangement is openly permissible in our legislation then it is not selective. If however it depended on a fairly contrived interpretation and the Revenue did not make the ruling publicly available then it is probably selective.

On the politics of it, yes it is a back door approach, not so much to get Apple to pay Ireland 13/19bn but to bring to a head the mighty irritant which Ireland's tax arrangements have been.

I am seeing no sympathy for our behaviour except from rabid Brexiteers and that is not a good place to be.
 

elacsaplau

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I've just read this thread so thanks to all. I now understand quite a bit more than when I started and would be very grateful if someone could take the time to very briefly answer the following questions please. This will certainly help me and perhaps some others in relation to all this. Some questions, as you see, are very basic.

1. If an US MNC who was not based in the EU sold a product in the EU, what CT and other taxes would be levied on the US MNC and by whom?

2. What taxation advantages have historically been available to US MNCs establishing in Ireland? Specifically, is it just the nominal lower rate or are there additional "avoidance" mechanisms not available elsewhere and if so, what precisely?

3. For US MNCs that were established in Ireland, are they or not subject to CT within each of the EU countries that they operate?

4. Did the Irish Revenue share its 2007 ruling with its counterparts within the EU at that time?

5. Does the Irish Revenue typically publish its rulings and what happened in the Apple case?

6. I understand that there was a provisional EU ruling in relation to Apple in 2014, which was broadly validated by the final ruling. Is it known, what arguments Apple/the Irish authorities made to the Commission between 2014 and 2016 and the reasons such arguments were rejected?

7. In 2007, if the Irish Revenue had said that the structure of Apple's European's businesses was inappropriate - how realistic/attainable would it have been for Apple to re-structure its businesses to substantially avoid CT within Europe (e.g. some variation of a Double Irish)? [You will note from Protocol's post #153 that pretty much all the action - in terms of profits - occurred post 2007!]

8. To put question 7 another way - if Apple's goal was to pay zero or minimal CT on the majority of its EU income (in the knowledge that such profits may ultimately be subject to CT upon repatriation to the US) - what specific advantages did the 2007 Revenue ruling confer that was not available to other MNCs?

9. To put question 7 yet another way, do we have comparative figures to posts 152/153 for the top 5/10 US MNCs operating in Ireland? If not, could this information be deduced from annual reports, etc?

10. I understand that the CT regime is scheduled to change for existing MNCs in 2020/1? Any chance of a micro summary of what the changes mean?

11. FINALLY, how could the Apple ruling impact of these scheduled changes?

Any light on any of these would be much appreciated. Oh yeah, I'm not expecting one person to have all the answers!!
 
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Sophrosyne

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sophie the issue is was Apple's ruling selective. As I understand Seamus Coffey, if the arrangement is openly permissible in our legislation then it is not selective. If however it depended on a fairly contrived interpretation and the Revenue did not make the ruling publicly available then it is probably selective.

I am seeing no sympathy for our behaviour except from rabid Brexiteers and that is not a good place to be.
It is only an issue if you buy into the commissioner's rhetoric.

There is no reason to suppose that the tax rulings were selective.

The tax rulings simply applied Irish tax law.

The difference in how companies are taxed under Irish and US legislation is and was well known to any international tax practitioner worth their salt and could have been exploited by any multi-national.
 

Duke of Marmalade

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Most of the informed commentary is coming to the same cul de sac. If the ruling has convincing arguments that it was a selective sweetheart deal for Apple then it's hands up. We won't know until we see the actual ruling and we mightn't even know then, after all it must be sufficiently unconvincing to persuade the government to appeal.
 

Firefly

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Where will they go?
The truth is I don't have that information, however, I am sure the IDA and Revenue have looked into this and have advised the government in this regard.

And while we are at it, isnt the reason they are here is because of our 12.5% CT or because its actually anything from 0.005% to 12.5%
I think you are right actually, the 12.5% is the headline rate. Of course, multinationals employ both their own experts and also hire external experts on taxation to try to reduce their tax burden as much as possible within the confines of the law - I don't see anything wrong with that in the same way a lot of PAYE workers put money into pensions to avail of tax deductions. All perfectly legal.

From a moral perspective, I would like the companies to pay more tax for sure, however, again I am sure the IDA and Revenue have looked into this and have helped government policy in this regard. I imagine many cost-benefit analysis have been done over the years and given how driven the EU seem to be in grabbing some of our cake, we're probably doing something right.
 

TheBigShort

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Firefly

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https://www.rt.com/shows/keiser-report/358886-episode-max-keiser-965/



Perhaps, but the show above has a half hour discussion on the Apple tax. One point made was that because of our supposed 26% increase in GDP (apparently because MNC posting additional profits in Ireland) we are in hoc to an additional €320m to the EU funds.
This equates to about 5,500 jobs at €70,000 pa at Apple.
It's a fair point and who can forget the Leprechaun economics from the CSO!
 

elacsaplau

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I've just read this thread so thanks to all. I now understand quite a bit more than when I started and would be very grateful if someone could take the time to very briefly answer the following questions please. This will certainly help me and perhaps some others in relation to all this. Some questions, as you see, are very basic.

1. If an US MNC.....
Just bumping this post - anybody able to explain even some of the questions?
 

odyssey06

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http://www.rte.ie/news/2016/0926/819281-budget-2017/
Green jersey "attack on sovereignty" mantra is looking somewhat silly now.
Very much a softening of approach, negotiations would appear to be working well behind-the-scenes.
The Director of the OECD's tax policy and administration unit has said... Most of Apple's tax liability belonged with the US, as this was where Apple's intellectual property was developed, and it was fundamental to the OECD/G20 approach that taxation should be aligned with activity that generates profits - in this case the research and development that produced the intellectual property that Apple makes the bulk of its profits from.

Let's hope the EU comes to the same sensible conclusion,
 

Purple

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Good news for this country and our continued policy of stealing taxes from the poorest people in the world in order to fund our public services.
 

Sophrosyne

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The Commission considered that the tax rulings in question constituted State aid unlawfully put into effect by Ireland. The aid was declared incompatible with the internal market. The Commission demanded the recovery of the aid in question. According to the Commission’s calculations, Ireland had granted Apple 13 billion euro in unlawful tax advantages.

The decision of the General Court of the European Union was that it annulled the contested decision because the Commission did not succeed in showing to the requisite legal standard that there was an advantage for the purposes of Article 107(1) TFEU.

Article 107(1) TFEU: ‘Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.’
 
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