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For sure they are throwing lawyers at it. It's 13bn after all. But the underlying reason for the appeal is the same; the law is not yet clear as to what should happen.

Where do you see the lack of clarity? A wish to avoid paying is not lack of clarity.

The case is between the Irish government and the EU. Ireland made a a tax deal with Apple. Ireland also made a no corporate subsidy deal with the EU.

EU wants apple taxed. Ireland says a tax break is not a subsidy, and a subsidy would be if they gave Apple grants, funds, or special loans

> Ireland also made a no corporate subsidy deal with the EU.

That seems odd. For example, if the government provides a national healthcare system, this is effectively a subsidy to employers who can then avoid providing a health plan their employees might otherwise demand or otherwise have to pay them more to compensate for their need to pay for their own healthcare. How is this being distinguished from any other form of subsidy? Isn't subsidizing things what governments do with tax money?

Bans on state subsidies are a core principle that enables the EU single market. Otherwise the market could easily be distorted by state aid. However it’s far from simple in practice and is something the member states have been arguing about forever.

The rest of the eu has never been happy with irelands tax policy but since taxation is a national competency they can’t do anything about it directly. They can however frame it as state aid and try to attack it that way.

Edit to add, information on how state aid works in eu context: https://enterprise.gov.ie/en/what-we-do/eu-internal-market/e...

> Bans on state subsidies are a core principle that enables the EU single market. Otherwise the market could easily be distorted by state aid.

It seems impossible to avoid this. If one state spends money on something that benefits businesses and another spends it on something else, those businesses will prefer the first one. But this isn't actually that much of a problem because each state has finite resources and its people get to decide how to use them. If one wants to have a UBI (which might increase entrepreneurship and the number of small businesses engaged in taxable activity) and another wants to lower unemployment by attracting large employers with subsidies and a third just wants to have lower taxes, what's the problem? That one might actually work better than another?

Without getting into the nitty gritty of it, it seems pretty obvious that there is a lack of clarity given that the European Commission came to one conclusion, the General Court concluded that the European Commission was incorrect and now an advocate general for the European Court of Justice has concluded that the General Court was incorrect. These are all smart people who have spent a lot of time and effort studying the law in this area. There are a lot of extremely reductionist takes on the case in the media but the actual legal principles in dispute, and their application to the facts, are quite complex.

You keep mixing up "muddying the waters to avoid paying tax" and "lack of clarity" The "lack" you speak of is generated by a megacorporation to avoid paying their part - and you keep attributing it to the wrong party.

It's not apple V. EU. It's Ireland Vs. EU. The real crux of the argument is; Does Ireland have the authority to grant Apple it's deal.

It is the EU institutions who are disagreeing with each other, Apple have nothing to do with it. The General Court of the EU isn't muddying the waters to help Apple avoid paying tax.

This is the General Court's judgment by the way: https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:62...

Corporations will always attempt to lower their costs. It's like blaming the rain for being wet.

It isn't inherently necessary to have a tax system so convoluted that these games are even possible. If you tax wages and companies employ people in your jurisdiction then they have to remit the tax. If you tax sales and people buy things in your jurisdiction then companies have to remit the tax. If you tax property and companies own property in your jurisdiction etc. etc.

The problem is governments keep trying to tax companies not based on what happens in their jurisdiction but what happens outside of it, which they can only do sometimes, and that gives the companies an opportunity to find ways to make it one of the times they can't. Just stop doing that and tax the things that actually happen in your jurisdiction.

Ireland gave Apple a tax deal. The EU is arguing Ireland as part of the EU is not allowed to set it's own tax policy. The lack of clarity is Ireland's claiming it's still a sovereign nation and can set taxes but the EU says no you're not.

That's not true. EU nations set their own tax policy freely. That's why the EU is claiming it isn't simply a tax issue, but a hidden subsidy. The EU already lost once, but they are trying again

If lower tax rates are a "hidden subsidy" then clearly they can't set their own tax policy freely....

Well clearly there is a lot more to this situation if you want to actually look at it.

Let's assume the law isn't clear, ans since I am no tax lawyer I actually cannot tell either way, pursueing that clarity at court is exactly what I would expect from Apple and the EU to do. So, the system is working as expected here.

If the system was well-functioning the tax law would be clear enough that it doesn't take a team of lawyers and courts to know what's permitted.

How is anyone supposed to arrange their affairs if the law they're going to be subjected to isn't established until after the fact?

Laws are never are clear enough, there is always room for interpretation. Laws are not some piece of software that give predctable answers, hence courts and the whole legal system. And it is the latter one atvwork here, as intended.

This is a rationalization for convoluted legislation. The impossibility of perfection is a poor excuse for mediocrity.

Notice that we almost never hear about corporations avoiding payroll taxes or VAT. They avoid this kind of tax in particular because the rules are unusually squishy and incoherent, and every time they find another way to do it, governments respond by making it more complicated or even less coherent instead of addressing the root cause and replacing it with something clearer and simpler.

Countries in Europe have been gradually tightening up on corporations avoiding payroll taxes by declaring employees as contractors. In the UK it's known as IR35 working. The EU have recently proposed the platform working directive, aimed straight at this problem.

This is not a means to avoid payroll taxes. They're still being paid by the contractor. And in a way that costs the corporation money, if contractors have to pay the tax out of after-tax income, because then they'll demand higher compensation to account for it, by the amount of the tax plus the amount of the tax due on the increase in compensation.

There are other reasons corporations prefer workers to be contractors, but that isn't it.

In the UK both employer and employee pay payroll taxes (national insurance) at about 13% of salary, additionally employers must pay a minimum of 3% of salary to a pension.

Contractors paid themselves a minimum salary to avoid the payroll taxes. They then took the rest of their earnings as dividends from their personal services company instead, the combination of payroll taxes + income taxes being higher than taxes on dividends.

Since that ruse has been heavily restricted, employers have had to increase contractor pay to make-up for contractors having to pay more income tax + national insurance.

To be fair, the EU responded to this case by enacting a new directive that says "the minimum corporate tax shall be 15%".

OK, it's unfortunately 175 pages long [0] instead of seven words, but that really is the gist of it. The current legislation is a more "squishy and incoherent" set of rules [1] that say you cannot give "state aid" preferentially to any company, the technicalities of which are being litigated in the ongoing Apple case.

[0] https://data.consilium.europa.eu/doc/document/ST-8778-2022-I... [1] https://competition-policy.ec.europa.eu/state-aid/overview_e...

But this is the problem, right? You can't really do that because governments are supposed to spend tax revenue on things that benefit those in their jurisdiction. The extent of tax dollars not used for this is a measure of government inefficiency and in a perfectly efficient government it would be zero, i.e. the average taxpayer would receive benefits equal to what they pay in taxes.

What they're kind of implying is that they want multinational corporations to pay more than they receive so some other people can receive more than they pay, but they haven't actually specified who or by how much. It would be pretty silly and inefficient to deny large companies the use of government-operated transit systems or police protection, but to make it at all practical you end up creating enough exceptions that anyone can find a loophole.

I feel like the elephant in the room is this. A lot of these huge companies are monopolies or nearly so, and a large proportion of their profit is a monopoly rent. But a monopoly rent isn't attributable to a particular factory or the location of your software developers. It can't be attributed to something happening in any particular jurisdiction because it's actually attributable to something that shouldn't be happening at all, and which doesn't have any corporeal existence or physical location. So those profits naturally get declared in whichever jurisdiction has the lowest taxes.

But the problem is not that the monopoly rent is being taxed in the wrong jurisdiction or at the wrong tax rate, the problem is that the monopoly rent exists. Stop trying to pin it to a particular place and find a way to eliminate it.

They paid taxes according to the laws of a sovereign nation. Seems like a done deal to me. Europe should get their affairs in order.

If Ireland shouldn't have done that, that's not Apple. It really seems like a case of "the law should have been", which seems to work in Europe.

In regards to taxation and regulation of services sold into the EU common market Ireland is not fully sovereign. They have their act together, this is the legal process playing out.

Aren't they still sovereign? They just might be sanction/fined by peers or kicked out of the union if they don't comply?

It's not like someone's going to declare war on Ireland and conquer them to force compliance the way a citizen breaking the law might be conquered by a police force.

The winning move for a single round of the Prisoner's Dilemma is to defect.

The winning move for the Iterated Prisoner's Dilemma is tit-for-tat.

Enforcement mechanisms lead actors to behave more cooperatively, and everyone knows everyone is better off if everyone is cooperating.

That doesn't make anyone in the game not sovereign

The enforcement mechanism is a voluntary de jure loss of sovereignty, even though the de facto sovereignty to leave the enforcement mechanism remains.

Ok, that makes more sense

Europe is fine the way it is. Nations should be sovereign and common economic policy should be policed via fines such as this one. Hopefully this way corpos will learn that tax dodging in Europe is counter productive

Trying to fix this via fiscal union leads to more brexits

The fact that they're being in this mess absolutely means that they did not pay taxes according to the laws. Did you miss what the article says?

it just means a tax authority disagrees with someone rich enough to see what a court thinks

public servants don’t know their laws better than private lawyers do, one of the beauties of using lawyers is that the public servants don’t know which legal rationale you are using and have no way to find out except in the court.

this is often a deterrent for them to bother, because they know they can be wrong or completely blindsided by a mixture of laws they never considered.

in this case, it wasn't a deterrent and we will find out.

but just because a tax authority disagrees doesnt mean the defendant was not compliant according to the law. it means the calculators are different and everyone has to figure out why.

> Did you miss what the article says?

Yes, I read it, including the bit that said the Irish government told Apple their tax affairs were legal.

Apple paid taxes according to the laws that Ireland had at the time. The issue is not that Apple did not pay taxes according to the law, it’s that the laws themselves were incompatible with Ireland’s other obligations.

Ireland being in the EU, and Apple doing business across the EU, means that Irelands opinion might not be the last or valid one.

> Apple paid taxes according to the laws that Ireland had at the time.

The TFEU/Lisbon Treaty is law in Ireland and the allegation is that the deal between Apple and the Government was in breach of Article 107, which regulates State Aid.

The ultimate arbiter of whether the deal was lawful is the CJEU. Until decided there, it is uncertain whether Apple acted lawfully.

> The issue is not that Apple did not pay taxes according to the law, it’s that the laws themselves were incompatible with Ireland’s other obligations.

This just fundamentally misunderstands the relationship between member states and the EU. The EU Treaties and subsequent Regulations (although not Directives, which must be transposed into law nationally) are actually laws across the bloc. Not foreign treaties, not state obligations, but actual laws. Furthermore they take precedence over national laws and can be enforced by the bloc at a judicial level.

In addition, whether the Government of the day gave assurances of lawfulness or not, all large enterprises know that only the courts can actually decide whether a deal is lawful or not. This is the same in most democracies, including the US.

They paid taxes according to their twisted interpretation of the laws.

A number of governments seem to disagree with that interpretation.

If I was Apple or any other megacorp I would happily pay the taxes and pay them publicly because of all the goodwill and favors and all the greased politicians and folks it can buy.

It’s less hassle than lawyering and cheaper and instead you can focus on building relationships or getting other benefits than hoarding cash which Apple clearly can print like a central bank.

But someone would not have been promoted (or would not have gotten a huge bonus) without taking advantage of that perceived tax loophole! /s

Seems like there would be cheaper ways to buy good will greased politicians.

That might be the case for super local taxes (eg. Paying land tax to the town), but for nationwide taxes even a big company makes basically no difference. Therefore, politicians don't really care - it isn't their money and doesn't directly impact them.

Elon paid one of the largest (the largest?) personal tax bills ever.

How’s that working out for him?

Well he does enough self owning to erode any good will he’s ever earned. You can’t fix stupid. The man is a genius but socially very stupid.

Ireland didn't want Apple to pay either, as they wanted to be able to keep doing this sort of deal.

It's in Ireland's best interest: https://en.wikipedia.org/wiki/Put_on_the_green_jersey

That's the way countries should behave generally.

Countries set the bar for human rights, morale and ethics. What if they don’t matter if some provides the money?

> https://www.freshbooks.com/glossary/tax/double-irish-dutch-s...

> https://en.wikipedia.org/wiki/Double_Irish_arrangement

> https://en.wikipedia.org/wiki/Ireland_as_a_tax_haven

What portion of Ireland's GDP is "American multinational companies" using them for tax avoidance?

As long as it is legal for Apple to route the money it makes in America back to shell companies in Ireland and pay 12.5% corporate tax instead of something higher elsewhere, why would it ever stop?

Around 23% in 2020, based on the difference between GNI* and GDP. It has been higher than that in the past, but increased medical manufacturing pushed it back. It's not just American companies, but they're certainly the largest. The most notable effect here is that you learn to be wary of any stat mentioning "GDP" or "GDP per capita".

In 2015, when the US cut-off date for many of these transfers hit, the CSO refused to release accurate corporate tax numbers because it would have identified the companies involved.

What do you tell your CPA to do, when tax time rolls around?