1. TechSpot is dedicated to computer enthusiasts and power users. Ask a question and give support. Join the community here.
    TechSpot is dedicated to computer enthusiasts and power users.
    Ask a question and give support.
    Join the community here, it only takes a minute.
    Dismiss Notice

Apple hands Ireland a mind-boggling $16.7 billion in taxes

By LemmingOverlrd · 18 replies
Sep 18, 2018
Post New Reply
  1. For the past couple of years, a war has been raging between the head beancounters of the European Union, the Republic of Ireland and Apple. The TL;DR is that Apple got massive tax breaks to set up shop in Ireland, and has paid next to nothing (less than 1% corporate tax) over billions of dollars of business carried out in the European Union, which the European Union considers to be an unfair advantage over the competition.

    Of course, EU officials declared this deal between the Republic of Ireland and Apple Inc. to be illegal. Neither Ireland nor Apple believed taxes were owed, as Apple had brought thousands of jobs and some degree of economic prosperity to the country.

    Fast-forward to 2018 and, in February, the European Union ordered Ireland to collect on the taxes it believes are due, plus interest. Begrudgingly, Ireland has been in the process of collecting this money from their tech overlords and today received the last instalment of the €13.1 billion, plus €1.2 billion in interest (that's $16.7 billion), in taxes.

    Irelands' Finance Minister, Paschal Donohoe, was quick to explain the country had been held at gunpoint by the European Union and forced to take the money, "the government fundamentally disagrees with the Commission’s analysis in the Apple State Aid decision and is seeking an annulment of that decision in the European Courts, as committed members of the European Union, we have always confirmed that we would recover the alleged State Aid." reported FT.com.

    With this, the Republic of Ireland will no longer be 'held in contempt' of the EU governing body, and Apple will see its day in court go away... Both Ireland and Apple Inc. plan to appeal to have the decision overruled and the money returned to its 'rightful' owner, Apple.

    This is the kind of thing you'd expect to see on an episode of HBO's Silicon Valley. Unfortunately, it's real - albeit absurd - life.

    Permalink to story.

     
  2. Evernessince

    Evernessince TS Evangelist Posts: 2,977   +2,153

    Wish my tax rate was 1%...
     
  3. Vulcanproject

    Vulcanproject TS Guru Posts: 444   +488

    EU holding Ireland at gunpoint

    "You WILL collect 16 BILLION DOLLARS in taxes or face our wrath!"

    Ireland: "Waaaaaa please don't force us we don't want to lighten Apple's fat wallet!"

    Truly bizarre and illustrates the power of the world's biggest companies.

    You wish you were taxed less than 1 percent? I wish my government was actively fighting the EU in court for the right to not even collect my taxes lol
     
    Last edited: Sep 18, 2018
  4. HotToz

    HotToz TS Rookie

    I don't think that 1% TAX was legal, plus it is unfair to other corporations doing business with 30% TAX
     
    Reehahs and psycros like this.
  5. toooooot

    toooooot TS Addict Posts: 219   +99

    Hopefully they cant find a way to escape this time.
     
    ForgottenLegion likes this.
  6. Hammayon

    Hammayon TS Booster Posts: 103   +24

    You should tax all tech giants equally. Heck, these companies should not be allowed to set up shop in China or any other country other than American to keep the jobs, taxes, and money in the US. If you don't, then there should be tariffs. NAFTA and free trade sucks for americans whose companies are spreading their factories overseas, taking with them the jobs, taxes, and money.
     
    skipmichael likes this.
  7. toooooot

    toooooot TS Addict Posts: 219   +99

    I always thought that each company that does it should be taxed accordingly as soon as they bring their trade back to the states. Support every unemployed person who cant find a job because you moved it oversees while keep selling your stuff here, or go sell it to the people where you have your shop.
     
  8. ForgottenLegion

    ForgottenLegion TS Guru Posts: 267   +261

    <1% for massive corporations yet the poor people of the nation have to pay a mandatory 20%-50%?

    The rich get richer. Pure hypocrisy.
     
    BMAN61 and skipmichael like this.
  9. Cubi Dorf

    Cubi Dorf TS Enthusiast Posts: 74   +30

    EU is good at getting monies from America tech. My country should do same. Just declare they broke a law and make big fine. Easy $$$
     
    skipmichael likes this.
  10. Kibaruk

    Kibaruk TechSpot Paladin Posts: 3,558   +1,074

    So... this is how it really works.
    Ireland by Jan 2012 had unemployment rates of a whooping 16%, that's not good for Ireland, that's not good for the people of Ireland (counting the voluntary unemployment as well).
    Around this time big companies comes by offering thousands of jobs that will benefit Ireland and the Irish folks, but they ask in return to reduce the taxes.
    Fast forward to Jan 2018, Ireland unemployment is at 6.1% (Not saying that Apple was the white shinning knight, I mean thousands of jobs and not tens of thousands of job for the population of millions).

    Will you collect those billions in taxes and loose a whole bunch of opportunities by doing so? This is why both of them are appealing.
     
    BMAN61, sauri and Reehahs like this.
  11. Vulcanproject

    Vulcanproject TS Guru Posts: 444   +488

    We know why this is happening, the article explains it just fine.

    However using unemployment rates isn't that useful. Those rates in 2012 were because of the worldwide recession like in dozens of other countries, and the rates today mostly because of the slow recovery like in dozens of other countries.

    Not so much because Ireland decided on basically illegal tax breaks for Apple. Apple have avoided paying much tax in Ireland for decades before this, decades. It's just come to a head now.
     
  12. Capaill

    Capaill TS Evangelist Posts: 638   +311

    Yes, the tax deal with Apple was made in 1991. Apple moved to Ireland in 1980. From an article on the Business Insider, regarding how the deal was made in 1991:

    "The message is clear: We've been here for 10 years, we're a vital part of Cork, and if you don't strike a deal with us then maybe we'll go elsewhere.
    The Irish government agreed a deal with Apple in 1991 to only tax a certain bracket of its earnings, giving it a dramatically lower tax rate than it would have to pay in the US. Apple got its lower tax rate, and Ireland kept Apple in the country. For a long time, that arrangement worked well. But as Apple's profits soared, the EU started to look more closely at the deal."

    In another article in the Irish Independent newspaper today:

    "Whatever one thinks of Apple's Irish tax arrangements, and they haven't always shown this country in the best light, serious questions need to be asked about the approach adopted by the [European] Commission in reaching its decision. It is applying today's standards to decisions made up to 25 years ago. Most of the structures that permitted Apple to do what it did, most infamously the so-called "double Irish", have since been scrapped."
     
    Last edited: Sep 19, 2018
    Vulcanproject and Reehahs like this.
  13. Evernessince

    Evernessince TS Evangelist Posts: 2,977   +2,153

    It took them a long time to look closely. I make a single mistake on my tax returns for my business and the IRS are on me within the month. $320 mistake vs a $16.7 billion dollar one. Eh, I guess these governments have their priorities.
     
    cliffordcooley likes this.
  14. Ultraman1966

    Ultraman1966 TS Booster Posts: 109   +23

    Same for UK government. I am pretty sure that Vodafone owes the UK billions in tax from years ago but it is still unpaid. Again, if it was one of us doing it the Inland Revenue will have sent the bailiffs after us...
     
    BMAN61, skipmichael and Evernessince like this.
  15. Bluescreendeath

    Bluescreendeath TS Booster Posts: 83   +72

    Everybody in Ireland has to pay the same 20%/40% tax bracket though - not just the poor.

    And it's funny that the US has a fairly generous tax policy for our lower class and poor despite what our media likes to portray. The poor in the US fall under the 10% and 15% tax brackets, theoretically speaking. However, in the US, almost half the country doesn't pay federal income taxes because they don't make enough money and they get exemptions & breaks. Add that to the tens of thousands of benefit programs too. The top 1% paid 40% of the country's taxes (~40% tax bracket is the highest personal income bracket) and the top 10% paid 70% of the country's taxes.
     
  16. Kibaruk

    Kibaruk TechSpot Paladin Posts: 3,558   +1,074

    You forgot to say how bad the social and health system are, compare it with the social and health system in Europe and there you have most of the taxes.
     
  17. Bluescreendeath

    Bluescreendeath TS Booster Posts: 83   +72

    The health system isn't bad in terms of quality. The American health care system, in terms of quality, is actually pretty good. The problem is it is not readily available to everyone, as 10% of the population lack health insurance.
    As for social safety net policies, the US spends more overall and more as a % of its GDP on social welfare than Ireland does. 19.3% for the US vs 16.1% for Ireland. The US spends 60% of its overall federal budget on social/welfare/health programs.

    https://stats.oecd.org/Index.aspx?DataSetCode=SOCX_AGG

    https://en.wikipedia.org/wiki/List_of_countries_by_social_welfare_spending#As_a_percentage_of_GDP

    https://www.nationalpriorities.org/budget-basics/federal-budget-101/spending/

    The US also seems to have a comparable social security program as countries such as Canada or the UK:
    "In the U.S., the average retiree receives a benefit of $1,328 a month for a total of almost $16,000 a year while the maximum benefit payable is $2,663 a month for a total of $31,956 a year."

    "At a combined 276 pounds per week, a retiree could be looking at a maximum income of 14,352 pounds a year, or roughly $18,366 when adjusted to American purchasing power parity."

    "Taking the average Canadian Pension Plan income of $619 per month, we can calculate that a retiree would receive $968.88 per month in Old Age Security and Guaranteed Income Supplement payments for a total of $19,054 per year, or approximately $14,738 when adjusted to American purchasing power parity,"


    https://www.investopedia.com/articl...ow-does-us-social-security-measure-abroad.asp

    The US doesn't have a universal basic income program and relies entirely on a need based program. There are some disadvantages to that - but also some advantages because more money goes to people with greater need instead of that portion being distributed to everyone regardless of need. "Western" or "Northern" Europe's social safety net overall might be better, but the US's social safety net is not "bad" either.
     
  18. Kibaruk

    Kibaruk TechSpot Paladin Posts: 3,558   +1,074

    I'm almost certain you don't live in the US
     
  19. Bluescreendeath

    Bluescreendeath TS Booster Posts: 83   +72

    Then you would be incorrect.
     

Similar Topics

Add your comment to this article

You need to be a member to leave a comment. Join thousands of tech enthusiasts and participate.
TechSpot Account You may also...