The Irish government has an "indication" the European Commission will decide whether its tax arrangements with Apple violated state aid rules by the end of the year, it was revealed on Monday.
Regardless of which way they go, the findings won't hurt Ireland, Finance Minister Michael Noonan told news agencies such as Bloomberg. The minister claimed that any findings against the country would be "based on very thin legal grounds" and challenged in the European Court of Justice.
Last year, however, the Commission issued a preliminary finding that Apple was receiving unfair tax breaks in exchange for putting jobs in the country. In 2013 Apple admitted that it had been paying an effective tax rate of less than 2 percent for the previous decade — European Union regulations don't allow governments to favor individual corporations with special subsidies.
A number of businesses, including Apple, have exploited loopholes in Irish tax law to pay minimal taxes on billions in revenue funneled there from much larger markets around the world. Apple has consistently maintained that it's simply following the law, but that legality is currently in a shakier position, and the Irish government is working to close at least some of those loopholes.
In terms of jobs, Apple runs a variety of operations out of the Irish city of Cork, including administration, distribution, and manufacturing. In May, news emerged that Apple is considering a major expansion of local manufacturing.
If Apple is required to pay a standard tax rate of 12.5 percent, it could potentially reduce Apple's annual earnings by just under 10 percent unless the company finds another tax haven to funnel revenue through.
39 Comments
The Moon is a tax-free zone. As is the underwater city of Atlantis.
Why is the investigation into Apple, not the tax loopholes themselves? Since when are loopholes placed by the policy writers the fault of the companies that use them? Sure, many of them were put in place from lobbying by corporations, but considering how Apple has only recently started increasing their lobbying in recent years and how long these tax laws have been in place in Ireland, I don't see how Apple could be responsible for its existence.
and the likes of Microsoft, Google, Adobe etc will be looking with a great deal of interest.
Then the Atlantic version of the TTIP will make it all nice and cozy when the US decides to tax all companies that do any sort of business with the USA even if they have paid all their tax due in their country of domicile just to get even. (my impression of it anyway)
[quote name="SolipsismY" url="/t/188684/irish-minister-says-eu-probe-into-apple-tax-dodges-should-reach-finding-by-end-of-2015#post_2786008"]Why is the investigation into Apple, not the tax loopholes themselves? Since when are loopholes placed by the policy writers the fault of the companies that use them? Sure, many of them were put in place from lobbying by corporations, but considering how Apple has only recently started increasing their lobbying in recent years and how long these tax laws have been in place in Ireland, I don't see how Apple could be responsible for its existence.[/quote] Excellent point.
[quote name="Suddenly Newton" url="/t/188684/irish-minister-says-eu-probe-into-apple-tax-dodges-should-reach-finding-by-end-of-2015#post_2786006"]The Moon is a tax-free zone. As is the underwater city of Atlantis.[/quote] Mars is more in vogue.