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Comment by J0-nas | Hacker News Reader

I think it's quite amusing how Apple(+other companies) and their tax avoidance scheme earned them a fortune in "tax heavens" and now both the EU and the USA are trying their best to get some of the money back.

Here is to hoping EU politicians fix the tax system and force companies to pay a meaningful tax in the countries where they sell their products.

Personally, I'm not very optimistic considering J.C. Juncker is still one of the most influential EU politicians.

https://en.wikipedia.org/wiki/Jean-Claude_Juncker#Controvers...

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>>Here is to hoping EU politicians fix the tax system and force companies to pay a meaningful tax in the countries where they sell their products.

They already did. The tax is VAT and recent changes on electronic services had exactly the goal you mentioned in mind. It's just that the idea of income tax for companies is silly as it requires the tax authority to verify valuations of transactions (for brands, services etc.) and that will never be doable. The fixing would be to get rid of income tax for companies and substitute it with different taxes (like VAT for example).

> The tax is VAT and recent changes on electronic services had exactly the goal you mentioned in mind.

Those changes on electronic services make similarly little sense, as they require a service to apply taxes in the jurisdiction of the consumer rather than in the jurisdiction of the business. (And such regulations disadvantage EU companies, as a non-EU company with no legal nexus in the EU has no obligation to charge such taxes.)

> (And such regulations disadvantage EU companies, as a non-EU company with no legal nexus in the EU has no obligation to charge such taxes.)

This is not true. You can read about VAT MOSS and the non union scheme for more info.

By definition, a company or individual has no legal obligation to care about laws outside their jurisdiction. The EU can say anything it likes about what companies "must" do, but they have no jurisdiction over non-EU companies. (Unless their own country enters into some kind of mutual enforcement agreement, or unless they ship a physical item that has to go through EU customs.)

VAT is territorial.

You cannot refuse to pay VAT in a territory.

I think you've missed the point of the comment you replied to. You have no obligation to follow the laws (taxation or otherwise) of a country/territory that has no jurisdiction over you (and no other power of enforcement, such as customs for physical products).

Providing an electronic service to everyone in the world does not make you subject to the laws of every country in the world, as much as those countries might wish otherwise.

funny thing to say since the US Treasury is criticizing the EU over this abuse of tax law

The US and Ireland both signed off on the arrangement that apple and other companies use to avoid tax.

Now, a government that didn't exist at the time, is using new case law it has created, to retroactively change the tax laws of the governments underneath it.

Think of it as Europe's Marbury v Madison moment

It's not the EU's fault if Ireland signed incompatible treaties.

> Now, a government that didn't exist at the time, is using new case law it has created, to retroactively change the tax laws of the governments underneath it.

It's kind of tricky because though the EU as it is today is relatively new Ireland joined the European Economic Community which essentially became the EU. Also whenever that rule came into effect the special rules Ireland gave Apple should have been reevaluated and removed. They've always been against the state aid rule it's just not been tried until now. As for "changing the tax laws of governments underneath it" that's part of being in the EU you give up parts of your national sovereignty in a number of areas for the benefits of being in the open market.

> Ireland joined the European Economic Community which essentially became the EU

Forgot to finish this sentence:

"Ireland joined the European Economic Community which essentially became the EU back in 1973"

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