Apple has €13bn Irish tax bill overturned

On the other hand, Europe has lower inequality amongst citizens, and an argument could be made to say that this increases happiness. What they are missing out on wrt fortune 500's is creativity that creates new technologies that pushes boundaries and revolutionizes the world (perhaps an oversimplification of the argument). Though they may not be at the forefront of this, it would be inaccurate to say that they do not benefit from innovations occurring in the world.

My argument is that they currently occupy the coveted position to benefit both from the inequality of other countries yet retain the benefits of a more equal society. Viewing the entire world as an unequal society, the winners would be the ones at the top of unequal countries, followed by the equal countries, with those at the bottom of unequal societies trailing. Ideally the entire world would all have equal societies, but in no situation would I think countries with equality strive for the benefits of those with unequality

The situation is far more dire in the EU than even that would suggest.

Spain and Italy (#3 and #4 largest economies in the EU) will spend the next 20 years just trying to get back to where they were in 2007, and will have lost a minimum of 30 years to net economic stagnation. That's the good scenario.

Prior to the virus, France had seen zero net economic growth for 12 years. That's despite adding three million people to their population, which means the pie is shrinking for each French person.

Germany had seen zero net economic growth for 11-12 years. With the virus hit they'll probably go a net 20 years with zero GDP per capita expansion.

The same scenario is playing out across most of the EU's members. There's no growth to be found anywhere outside of the Baltics and Ireland (11m population combined), while social system costs continue to climb and demographics continue to age. You can see this erosion effect playing out for example in the collapse of EU spending on infrastructure (which has fallen below the US level as a share of GDP).

Who are you optimizing for?

And China, if anyone, has shown how protectionism, and making sure outside companies can only reach your internal market if they play by your rules, and favoring national companies over international ones, is a winning strategy in the 21st century.

The problem isn't taxes, the problem is founders who believe they are above the social contract. They want the benefits of a highly stable society with high taxes and high standards of living, but they don't want to pay their share of keeping that system alive.

There is no such cycle in Europe, and it’s all because the lack of stock options. Without them, startups only offer very low pay with little to no reward, and good luck trying to attract the top talent startups actually need to succeed.

What would Europe stand to get from having more Fortune 500 companies? It doesn't seem like it's helping in the US at all. On the other hand, Europe still has a much better lifestyle for people who are not rich.

We must end the concept that nations are subject to the market and corporations whims. That's the narrative they are spreading, but they can't do without Europe's profits, so it's better we realize that as states we have more power over them than they'd like to admit.

I think the biggest hindrance here is that transfer pricing is a complicated issue, that most voters don't understand the mechanics of, so there's not been a lot of pressure on politicians to solve it. It's been much easier to just lay the blame on immigrants or whatever, than to actually attack the root cause of the issue.

Furthermore, in the case at hand, while Ireland is free to set their tax rate to something low, like 12.5%, it needs to apply this to all companies, not allow any of them to fiddle their way to only paying 0.005% like Apple did. The commission considers this illegal state aid to a company, and I'd tend to agree. It's unfair competion when a company only operating in Ireland needs to pay 12.5% in corporate tax, while an international company with a creative ownership structure involving the Cayman Islands can pay effectively 0%.

[1] https://en.wikipedia.org/wiki/Base_erosion_and_profit_shifti...

Even assuming that's the case (sounds far fetched to me), would that mean they now wouldn't have to pay a fair tax rate?

Many people may no realise this, but this exactly holds for African countries too. As the continent develops, some countries will become certain roleplayers that essentially are already apparent now, for those willing to go and look for it.

South Africa is the financial capital of Africa, and it would do most people here good to emphasise that. It is an entry point into the rest of Africa (despite, or because of even, being the furthest away from Europe) and its long term trajectory is probably going to remain in what I guess we could call facilitation.

If we compare SA to Ireland or Switzerland, again, they are countries that attempt to facilitate development. I think tax needs to be a topic in its own right, and the exact properties of a country is also a topic in its own right.

Luxembourg will always be forced into a niche, and whether that niche is tax based on not depends on the options at their disposal. Wealthy people see tax as an expense just like any other and the onus is on ordinary people to build inherent value rather than simply financial value.

But you need cultural momentum for this. South Africa's niche role is compounded by cultural and African factors and I am first in line of those that want a foundational based economy, rather than a facilitation based one. But you really need the will to work hard and build inherent value. My final point is simply that one can complain about countries that focus on tax (or tax evation) but the real question is: What else are the options. (And I'm sure there are opportunities waiting.)

That is not true. They employee a few thousand people in an industrial estate outside a suburb of cork in fairly low ranking jobs. If they were to disappear overnight they would doubtless have an impact but not a fraction of €14bn

That stuff only remotely works with US companies because its tax regime wasn't a territorial one. As of a few years ago, the US finally transitioned to a quasi-territorial tax regime, which plugged some of the holes, but not all of them.

And you don't find German (or Japanese, Australian, &c.) multinationals doing this kind of thing because they have _proper_ territorial tax regimes. The US does not, and this kind of thing will continue to be a problem until the US finally does do what the rest of the world does regarding taxation.

And it would be nice if they did the same regarding personal taxation.

The EU argument was that Ireland's "previous established policies" were against EU treaty, and so the (alleged) special deal that IE gave Apple should be considered annulled since it was invalid from the day it was signed.

> On this basis, the Commission concluded that the tax rulings issued by Ireland endorsed an artificial allocation of Apple Sales International and Apple Operations Europe's sales profits to their "head offices", where they were not taxed. As a result, the tax rulings enabled Apple to pay substantially less tax than other companies, which is illegal under EU state aid rules.

> This decision does not call into question Ireland's general tax system or its corporate tax rate.

* https://ec.europa.eu/commission/presscorner/detail/en/IP_16_...

* https://en.wikipedia.org/wiki/EU_illegal_State_aid_case_agai...

I.e the ones benefiting from the current regime, and to lose in the reformed one.

It's a very interesting line of thinking when a company that produces new value and makes money by providing the value to the customers by voluntary transactions (and regardless their location) somehow is considered a robber of the state that produces nothing.

This is fundamentally the right answer, but don't underestimate the political difficulty in getting there.

Taxing "profits" in the location of the headquarters was always a seduction. You have an international company paying developers in California, manufacturing products in China, selling them in Germany, but if their headquarters is in France then France gets a cut of the profit from all of that whether they had anything to do with it or not. Very nice deal for France.

Until Ireland sets a lower rate and the company moves their headquarters there, and then the crying starts. No, it was a stupid way to tax from the start, not when they moved the headquarters to Ireland.

But you tax capital and labor and sales, well, the implications of that are different. Now if they have operations and employees where you are, they can't avoid the tax, except by moving out. But uh oh, if the taxes are too high they might do exactly that, so now you've got to worry about the rate again if you don't want to lose jobs to other countries. Or your people would have to accept lower salaries to keep that from happening. And on top of that if you lose the jobs you still lose the tax revenue.

The company also can't avoid taxes on sales if they want to sell to your people, but if the company wasn't in a monopolistic industry to begin with then it could easily be the customers paying most of those taxes and not the company.

So the taxes get paid, but so do the true costs of taxing things heavily. The free money everybody always wanted was never really available. And there may be some wailing and gnashing of teeth as people figure that out.

Like, as a concrete example, suppose you're an American who owns some car washes in France. $15m in sales, $10m in costs, $5m profit. You could do an equity-for-debt swap, and own the exact same assets in the form of bonds that pay $3m per year and a more indebted company with a $2m per year profit. Poof, you've just moved $3m of European profits and transformed it into $3m of American interest income. Maybe not the best idea, but if you live in the right jurisdiction...

The EU are say that Ireland’s laws break these EU treaties, and are thus invalid. There’s probably some valid questions regarding why the EU acted now, and not previously. But ultimately if those treaties has provide no time limit on enforcement, then the EU is free to pursue remediation whenever it wants. Today, tomorrow or two decades time.

Just because it's legal, doesn't mean it's right.

- It makes sense for governments to provide healthcare, education, police, the military, welfare for the elderly/poor/disabled, basic infrastructure like electricity, water, etc. These things don't tend to work well when privatized, and humanity has advanced to the point where we have sufficient productivity/technological advances that we can (and should) provide these things for everyone

- These things are expensive, extensive taxes are required to pay for them

- I believe progressive taxation is the most reasonable way to pay for these things. The poor pay next to no taxes, and as you get wealthier, a greater percentage of that wealth gets taxed, because you get less marginal benefit from it anyways. Jeff Bezos has a net worth of ~$180 billion. Apple has a cash reserves of ~$250 billion. Take $100 billion from either of them, and there's virtually no impact on the person or corporation. Raise those same taxes from ONE MILLION middle class individuals and small business ($100,000 each), and you utterly destroy those MILLION individuals/small-businesses. Tax revenue must come from somewhere, more of it should come from the uber-wealthy

- There are many forms of taxes, but ultimately they're almost all paid by individuals and businesses. For the lower, middle, and "normal" upper classes, as well as small to reasonably large businesses, progressive taxation is a reality. Those with the ability to pay more, do pay more

- However, for the uber-wealthy individuals and businesses, those with almost unimaginable wealth, they have the power and influence to literally alter the law for their own benefit. They use this power/influence to pay near-zero tax. But the services of government still need to be paid for, so it comes from everyone else, for whom taxes are actually a big deal, instead of the insanely wealthy, who could easily afford to pay massive taxes with basically no impact, but prefer to be even more insanely wealthy

When the altering of laws to favour the uber-wealthy happens through pure corruption (like literally paying off lawmakers, behind closed doors), it's obviously unethical. When it happens through more legalized corruption, like making big donations to political candidates, then using your position of influence to change laws, I think most agree this is still unethical. It's a bit more arguable when it happens via one country enabling gaping tax evasion, for the benefit of that country, at the cost of all other countries. From my point of view, it's nearly as bad - you're helping the richest of the rich evade taxes, normal people and smaller businesses are burdened with higher tax load to make up for it, and it's done for the good of a few over the good of the many. The scale is different, one-country vs. all-other-countries, instead of few-citizens vs. all-other-citizens, or few-businesses vs. all-other-businesses, but the impact is similar. The selfishness of a few leads to tax loopholes for the richest of the rich, and everyone else pays for it.

Obviously, the fight to close tax loopholes for the uber-wealthy is a tough one - they're so powerful, and they only have to win over a handful of lawmakers to evade taxes. But it's a fight worth fighting, IMO. The status quo, where the uber-wealthy pay minimal taxes, and the tax burden falls on everyone else, is leading to excessive wealth inequality, that is only growing over time.

Wouldn't it be simpler just to tax those things? We already collect those taxes, and can set any rates we wish. Why not just abolish the the tax on corporate profits?

In Ireland you pay 20% income tax on the first €35,300, and 40% on income above this amount (if you are a single person, there are different cut-offs for married people and one-parent families).

You also pay an additional Universal Social Charge on all income over €13,000 - between 2-8% depending on your income level, or 11% for self-employed income over €100,000. Add on pay related social insurance (PRSI) of 4% too.

It’s at 15 percent for people earning the median wage (€3,300), meaning half of all Germans pay 15 percent or less of their salary in income tax. Your range if very far removed from reality. (It is true, though, that for very high incomes 35 percent aren’t the ceiling, that’s somewhere in the forties if you are making several hundred thousand per month.)

I also don't consider CEOs with hundreds of millions annually income to be "normal people" either.

I'm not saying this is wrong, I'm just objecting to the notion of this being "normal".

I mean, a race to the bottom in the normal sense is cutting taxes or spending money on attracting these companies. We help these companies evade other countries' taxes, not our own.

Also, officially, the entities involved in the tax evasion are not related to the entities that actually employ people. Would Google move it european customer support offices without this tax deal? Theoretically, they could take advantage of it without employing anyone in ireland.

It's all horribly ambiguous. I've never really understood how it works.

This lawyer also has one of the worst success records in these types of cases.

they do however collect it

Right now Apple is probably winning a battle but might be losing the war. The next big EU mandate, besides tackling climate change, will probably be clamping down on tax shenanigans.

Next time they won't even be able to win anything as the law will be explicitly against such corporate maneuvers.

Corporations have become more powerful than ever thanks to globalization. Globalisation has also reduced individual goverments power over land/resources. (this is why supranational is a thing).

It would be somewhat of a pain in the ass to figure out a legal model that doesn't create unfair advantage/disadvantage but I leave that as an exercise for the law makers.

Users want something like a TB worth of compatible storage on icloud or google drive or $whatEver, for "free" and a pony. Apple can be like, that would be 4 euro and 22 cents per EU citizen, 2.34 billion for compatibility with other hosting providers and no to the pony, we don't do ponies.

[0] - https://ec.europa.eu/commission/presscorner/detail/en/ip_20_...

[1] - https://ec.europa.eu/commission/presscorner/detail/en/ip_20_...

You make it sound like writing such rules is easy. I don't know of any countries thst have succeeded in doing so.