Apple Wins Fight over $14.9B Tax Bill in Blow to EU | Hacker News Reader

Apple Wins Fight over $14.9B Tax Bill in Blow to EU

bloomberg.com

22 pointssz4kerto14 comments

Interesting summary of the case in the article below.

The two key points were:

- Arms Length principal

A big part of the Commission's case against Apple was that the agreements violated "the Arm’s Length Principle", which the OECD frames as we should reject transfer-prices that would not be agreed by independent companies negotiating at arm’s length. Apple and Ireland argued that this was not part of Irish Tax law, or EU legislation, rather a non-binding principal of tax reform.

- Where should IP profits fall

Apple argued that a large proportion of the value it created was derived from IP developed in the US.

To me it does seem that European Commission was stretching State Aid beyond what it was designed for here. There is an definitely a challenge in harmonising tax of multinationals, and preventing 'races to the bottom' but this is different to State Aid legislation, designed to prevent the propping up of inefficient domestic champions with favourable treatment.

http://competitionlawblog.kluwercompetitionlaw.com/2017/10/2...

Profits has be taxed where it is made not where the product was made.

Are you saying that Apple doesn't pay VAT?

That's not what I meant. But technically yes, Apple doesn't pay VAT, the customer does.

I live in Ireland. This is a sad day. For years now I've been wondering what the Irish govt would do with BILLIONS of dollars.

We could have had an Irish space program! A monorail! We could have bought Greenland!

It's even sadder for other european countries losing taxe revenues which could be used to fund educational, health and anti-poverty programs.

Margrethe Vestager just wants to steal from the US. She's basically a thief of US tax dollars.

Been an Apple fanatic since ~1982.

I really wish Apple would just pay their taxes. They can afford it. In fact, they can't give away their money fast enough (stock buybacks).

Whatever's fair. Excuses like "maximal shareholder value" and "fiduciary responsibility" are just rationalizations.

Further, it could be a great competitive strategy. Akin to their virtue signaling on privacy.

Amazon's greatest competitive advantage is their lower cost of capital. If Apple paid their fair share, it gives them the moral authority to insist Amazon does too. I'm sure they'd have allies in that fight.

This really is a sad day for European tax payers, for small businesses in Ireland even more so. How do politicians justify such agreements to their voters?

The agreement was made in the 80s and it single handedly brought Apple to multiple locations in Ireland instead of other European countries. I believe Apple is one of the largest employers in Cork.

It might be the largest employer in all of Ireland, while still only paying a small fraction of the taxes their workers pay

That's the deal Ireland made as a country. Favourable IP laws and low taxes for jobs.

I personally find it ethically wrong, but I have benefited from it my entire life.

It's also worth noting that this deal was originally done in 1991, when Apple were not as big as they are now.

The deal was renewed in 2007, pre iPhone. The renewal was the real mistake, to be honest.

The thing is, you don't magically get a foreign company to just move to your country and start paying taxes for no reason.

If Apple is 'stealing taxes' from a country, then it almost definitely not Ireland. It is US.

Why would Apple just randomly move to Ireland and start paying taxes there? Why not to Portugal or somewhere else?

Because without the agreement, they would also have no tax income from Apple, but fewer jobs.

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