Neil Hughes
The competition authority of the European Union is reportedly set to launch a formal investigation on Wednesday into Apple's corporate presence in Ireland, a strategy that it and other companies use to avoid paying taxes.
Additional details on the allegedly impending investigation from the European Commission were not shared by the initial source, Ireland's RTE, according to Reuters. A formal announcement of the investigation is expected to follow.
It's already been established through other investigations that Apple has not broken any laws in utilizing Ireland as a tax haven, so it's unclear exactly what the commission may be seeking in targeting Apple. A U.S. Senate investigation found that Apple paid just 2 percent tax on $74 billion in income made outside America, by moving billions of dollars in profits to affiliate corporations such as Apple Operations International in Ireland, where the effective tax rate is less than 2 percent.
Apple, for its part, has contended that it pays all of the taxes it owes and has broken no laws. Tax laws also force Apple to hold the vast majority of its cash overseas, otherwise it would pay high repatriation rates on bringing that money back to the U.S.
And Apple is not the only company that has set up operations in Ireland for its favorable tax laws. Other major U.S. corporations with a presence there include Google, Microsoft, Facebook, and Amazon.
Facing scrutiny from other countries around the world, legislators in Ireland have expressed interest in closing loopholes that companies use to avoid high taxes. Many companies utilize a strategy famously dubbed the "Double Irish with a Dutch Sandwich," in which funds are routed through the Netherlands to further avoid international taxes.
Andrew Orr
Amber Neely
William Gallagher
Christine McKee
AppleInsider Staff
78 Comments
I understand Apple is obeying the local laws but I know the real reason the EU is going after Apple and others is because they don't have any money and haven't figured out a legal and fair way of taxing their people to finance their countries.
Interesting. Perhaps an august body should be implemented to find out what these "fact-finders" have been up to since this has been going on for years. Where have these "geniuses" been hiding out, at a local pub?
There must come a point where every organization has to justify its existence. Hasn't Apple and all the rest been investigated on this before? The tax officials have been very lax in letting stuff like this happen.
Look at the dimwits in the US (congress) who were recently looking into this and when they asked, "What are you doing?" Apple's execs said, in effect, "You tell us. You wrote and passed the laws that allowed us to do this and now you act like we are not patriots."
The real problem is, $$$. Somehow, at one time, all this favored senators and congressmen's buddies and so it was OK. Heck, they would get trips to Europe, meals, 5 star hotels etc. Now that the US need money, and lots of it, they are trying to change the direction of the "blame" game. It is "The international corporation's fault, not ours." Send these bastards to jail.
For hardware, the way I understand it Apple pays its tax in every EU countries then send the money into Ireland. So its a cash placeholder and it affects US Tax not EU tax. Ireland is a good place to hold cash because Apple can invest its cash and only pay 2% in tax to Ireland on the interest it makes. For software and services, its another story, it looks like Apple is dodging EU taxes for everything itunes related. The EU may have a case on itunes sales, but on hardware sales I dont see anything wrong with this.
I understand Apple is obeying the local laws but I know the real reason the EU is going after Apple and others is because they don't have any money and haven't figured out a legal and fair way of taxing their people to finance their countries.
So just like the US then ;-)
Apple should just buy the EU. ;)