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  #61  
Old 31.08.2016, 22:03
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Re: Apple faces huge bill from EU

These tax deals between countries and corporations, are there normally written contract?
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  #62  
Old 31.08.2016, 22:06
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Re: Apple faces huge bill from EU

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I quoted from the EU ruling.
Within that is a description of Apple creating a mythical head office of its Irish shell company, with no tax residence at all.
Not in Ireland, not in the US, nowhere on Earth.

The EU considers that to be legal fiction, and I see it that way as well.
Now the courts will rule whether a tax residency of "nowhere" is legal.
I know you were quoting the article. I was clarifying the concept. I don't disagree that it is a legal fiction. Many things are. But the concept isn't based on the company's so-called location, it is based on its tax residency (or lack thereof), which is a different legal concept.

Perhaps you've interpreted my remarks as support for Apple. They're not. I'm just clarifying the concepts at play.

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Apple is already transfer pricing between its entities in Ireland and much of the world.
The EU is not questioning those arrangements, or the lower corporate tax in Ireland.
The EU and OECD are questioning the transfer pricing arrangements in Ireland and elsewhere. This is the point of the BEPS initiative. Check it out http://www.oecd.org/tax/beps/.

This is common knowledge amongst tax practitioners. Indeed, compliance with BEPS is generating good business for us.
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  #63  
Old 31.08.2016, 22:08
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Re: Apple faces huge bill from EU

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These tax deals between countries and corporations, are there normally written contract?
They can take the form of an administrative ruling, an agreement, an advisory opinion, a comfort letter, a general answer to a general FAQ, a notice, a legal opinion, etc.
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  #64  
Old 31.08.2016, 22:20
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Re: Apple faces huge bill from EU

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They can take the form of an administrative ruling, an agreement, an advisory opinion, a comfort letter, a general answer to a general FAQ, a notice, a legal opinion, etc.
In such cases, can the EU compel a country to break a law, commit tort, or breach a contract?
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  #65  
Old 31.08.2016, 22:26
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Re: Apple faces huge bill from EU

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Hardly ... even the Irish public cannot believe we have gotten away with ludicrously low corporate tax rates for so long and fleecing the EU while doing so
What do you think Ireland's corporate tax rate should be?

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- the US govt specifically insists on local fully 35% tax paying legal entities from EU companies operating on their territory.

As always the US does not wish to play by the normal rules :

https://help.cbp.gov/app/answers/det...-united-states
You are conflating the US federal corporate tax rate and the sales tax issue. The general federal corporate tax rate is 39% but because of deductions, credits and off-sets, no so-called C Corporation pays that amount. It takes an army of tax lawyers to navigate the US tax code, which is terrible for my country but good for me.

I'm no expert on US states' sales taxes but I believe you as a consumer can get your sales tax back from New York (and NYC?) if you spend at least $X amount. Not sure how that works though.

Keep in mind that there are conceptual and practical differences between a sales tax (US) and a value added tax (EU countries) that may account for the differences in how refunds are addressed.

Switching from sales tax to US tax of non-resident aliens ("NRA Tax"), the US has tax treaties with many European countries, such as Ireland, the UK, Switzerland and Luxembourg, that allow EU residents to receive reduced (or zero) tax rates on certain US source income, or if withholding of tax was made at source by the US withholding agent or Qualified Intermediary ("QI" - a participating foreign bank), then the beneficial owner of the income can seek a tax refund from the IRS. The IRS has made this harder to do this year but processing tax refunds and offsets are still important bank service offerings to their clients.
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  #66  
Old 31.08.2016, 23:02
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Re: Apple faces huge bill from EU

I wonder how many people complaining about Apple's tax arrangements own an iPhone?
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  #67  
Old 31.08.2016, 23:04
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Re: Apple faces huge bill from EU

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Well, it's common knowledge in the tax world that the EU hates the Irish corporate tax rate. The EU has been bullying Ireland in an attempt to get them to raise it to a level France/Germany finds acceptable for many years now. This decision is just the EU's way of letting the shoe drop.
Dancing to U2, no doubt

apple-faces-huge-bill-eu-14192695_1084365451599112_5444426463272387998_n.jpg
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  #68  
Old 31.08.2016, 23:08
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Re: Apple faces huge bill from EU

Ryanair boss, Michael O’Leary said the Irish government should tell the EU to “f**k off”. Lol.

http://www.independent.co.uk/news/pe...-a7218401.html
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  #69  
Old 31.08.2016, 23:13
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Re: Apple faces huge bill from EU

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You are aware that U2 have "moved their business" to the Netherlands in 2005 to save some tax in Ireland... there have even been protests at festivals on U2 not paying their taxes... Bono is all about "let's cut the debt of poor countries" and at the same time feels he should not be "stupid" about business when it comes to his own tax bill. In other words: Other people should write off the debt of the poor and he will sing about it...


https://www.theguardian.com/music/20...st-glastonbury
Lol, "protests at festivals", a better protest would be not turning up at all. But still people go.

Btw, I think that Bono is an arse, but he was right that Ireland's tax system has been good for the economy.
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  #70  
Old 31.08.2016, 23:20
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Re: Apple faces huge bill from EU

Everyone rejoices because the EU says Apple has to pay some money. Yet the questions people should be asking:

Why is the EU meddling in the tax affairs of a sovereign nation?
Why is tax across the EU so high?
Where is it all going?

I'll say it again; tax is theft.

Thank Christ I live in Switzerland.
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  #71  
Old 31.08.2016, 23:26
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Re: Apple faces huge bill from EU

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What do you think Ireland's corporate tax rate should be?
The same for all firms operating in its territories without exceptions.


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You are conflating the US federal corporate tax rate and the sales tax issue.
It's discriminatory and morally bankrupt tax policy of the US government - again backing up the case that the US does not have a leg to stand on in the field of International tax legislation.

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The general federal corporate tax rate is 39% but because of deductions, credits and off-sets, no so-called C Corporation pays that amount.
Bullshit. I work for a Swiss firm that pays full corp tax rate on it's US business.

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It takes an army of tax lawyers to navigate the US tax code, which is terrible for my country but good for me.
The reputational risk to an EU firm is so large that EU firms - including Swiss ones would rather pay the tax rather than risk discriminatory treatment at the hands of the US govt. This explains why Goldman Sachs bizarrely has not been subject a 1 tn fine by EU authorities for improprietries leading to the global meltdown in 2009 whereas both Deutsche Bank and UBS have been handed heavy fines by the US govt. It also explains why the limit of liability for the Deepwater Horizon oil spill was not allowed to be constrained by the legal limit of 75m USD but rather the arbitrary fee of 20bn (nice round number) was picked :

http://bigthink.com/politeia/how-lim...-causes-spills

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On Thursday, Republicans blocked an attempt to lift the liability cap for oil companies for the fourth time. Although BP has agreed to establish a $20 billion fund to pay for damages caused by the Deepwater Horizon spill and has promised to pay “all legitimate claims,” under the Oil Pollution Act of 1990 oil company liability for spills is capped at relatively miniscule $75 million.
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I'm no expert on US states' sales taxes but I believe you as a consumer can get your sales tax back from New York (and NYC?) if you spend at least $X amount. Not sure how that works though.
A myth peddled by many retailers in NYC - I have spent several hours wandering around JFK for a tax refund but trust me - as that US gov website says - Uncle Sam does not play by the rules.

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Keep in mind that there are conceptual and practical differences between a sales tax (US) and a value added tax (EU countries) that may account for the differences in how refunds are addressed.
Do you believe in Santa Claus as well ??? VAT is a sales tax - called so as it's levied at the point of sale.
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  #72  
Old 31.08.2016, 23:32
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Re: Apple faces huge bill from EU

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Everyone rejoices because the EU says Apple has to pay some money. Yet the questions people should be asking:

Why is the EU meddling in the tax affairs of a sovereign nation?
Why is tax across the EU so high?
Where is it all going?

I'll say it again; tax is theft.

Thank Christ I live in Switzerland.
Is Greece a sovereign nation ?? How sovereign ?? Just like the "refugees" systems like Ireland allow entities be they individuals or corporations to evade taxes - a tithe system would be far more efficient and equitable whilst having the bonus of putting plenty of tax accountants and lawyers to more worthwhile use doing anything else.

I agree with you - taxation is a theft of a sort - it implies that one person knows how to spend your money better than you do. Having said that if one acknowledges that there is some merit in a state then that state must be financed somehow - I would argue that a VERY small state - absolutely set against the corruption that both the EU and the US have come to represent - should be financed by a low but fixed tax rate on all economic activity - that way it becomes impossible or economically unattractive to avoid.
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  #73  
Old 31.08.2016, 23:38
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Re: Apple faces huge bill from EU

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Everyone rejoices because the EU says Apple has to pay some money. Yet the questions people should be asking:

Why is the EU meddling in the tax affairs of a sovereign nation?
Why is tax across the EU so high?
Where is it all going?

I'll say it again; tax is theft.

Thank Christ I live in Switzerland.
this is not the issue.

the issue is that if the tax on profits is x% and a company negiotates it down to lower than x, this is unlawful state aid.

this is not allowed as per EU regulations and should therefore be paid back. I think this is very fair. Apple and Ireland should have known this when making the deal.

also, it gives Apple an unfair competitive advantage because they pay less tax than their competitors.
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  #74  
Old 31.08.2016, 23:39
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Re: Apple faces huge bill from EU

Its an attempted looting. But the EU apparently got its inspiration from the US, which was going after the same loot:
https://www.theguardian.com/technolo...ce-senate-live

Now, the US is doubly ticked off, because if Apple pays, Apple can claim it as loss for US tax credits.

Apple should pay proper taxes and does, but this situation isn't Apple's fault. I think Apple will likely partner with Ireland to amicably reconcile this.
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  #75  
Old 01.09.2016, 00:25
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Re: Apple faces huge bill from EU

I wrote up a nice reply, then got busy arguing the very same topics in the real world, and NomadAmericano preceded me with very well articulated, nice replies, so I won't repeat myself.

To close my contribution, I still see nothing wrong with a company making a LEGAL preferential tax agreement with a sovereign nation (e.g. Ireland), if said sovereign nation thinks it's OK, under its own laws, to sign that agreement. The economists at the Irish tax authorities are not dumb and Ireland is not a damsel in distress, if they negotiated it, they thought it was a good idea. Nothing prevents other taxpayers to seek the same type of tax rulings with Ireland or whoever else.

As for the EU: (1) if I was Ireland, I would call BS. Either the EU goes all the way and uniforms the EU tax law, whereby all member states have to abide or else, or I would tell them to get lost because they have no authority/jurisdictions on my (Ireland) tax laws. (2) if I was Apple, I would tell the EU to get lost too. Unless Ireland audits me (Apple) or breaches its contract with me, reneging the ruling, I would do nothing and not be concerned in the least. If I was Apple, I would perhaps put out some kind of marketing/corporate governance statement to appease the masses, which, as it looks like, they have issued.
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  #76  
Old 01.09.2016, 02:06
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Re: Apple faces huge bill from EU

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Explain then why Ireland are challenging the decision. Take your time.
Ireland ARE challenging the decision? Shouldn't that be Ireland is challenging the decision?
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  #77  
Old 01.09.2016, 10:29
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Re: Apple faces huge bill from EU

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Apple is already the largest taxpaying company in Ireland. No wonder Ireland don't want to piss them off as they may leave & then get nothing.
The greed of governments never ceases to amaze me.
Fixed that for you:

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The greed of large corporations never ceases to amaze me.
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Old 01.09.2016, 10:34
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Re: Apple faces huge bill from EU

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Fixed that for you:
No it's the EU being greedy, not Apple. There are 2 sides to every contract, both parties were presumably happy when they signed them & appear to still be happy.

Remember income tax was introduced as a temporary measure in the UK in 1799 to pay for the Napoleonic wars, the highest rate was 10%. Governments got used to easy money so this temporary measure never ended, just the rates when higher The highest rate went to 99.25% during the second world war. Sounds like greedy governments to me.
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  #79  
Old 01.09.2016, 10:37
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Re: Apple faces huge bill from EU

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Ireland ARE challenging the decision? Shouldn't that be Ireland is challenging the decision?
Or even iLand will be challenging the decision. Good thing we never argue semantics on here, eh?

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Fixed that for you:
The difference being of course that governments can't create jobs or wealth.

Apple on the other hand have created jobs, and huge tax revenue through income tax it's employees pay and VAT on every iphone sold.
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Old 01.09.2016, 11:23
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Re: Apple faces huge bill from EU

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Or even iLand will be challenging the decision. Good thing we never argue semantics on here, eh?



The difference being of course that governments can't create jobs or wealth.

Apple on the other hand have created jobs, and huge tax revenue through income tax it's employees pay and VAT on every iphone sold.
So if I create enough jobs I am free to do anything I want to create wealth?

The ruling and thus the discussion is not about creating jobs or wealth (for whom BTW) but about paying or not paying the taxes owed.

The discussion is not even about shifting profits to a tax haven that Ireland is. It is about enjoying a preferential treatment even in that tax haven and paying a minuscule amount of the already low tax rate in Ireland. THAT is the topic.
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