European Union finance ministers reportedly discussed how to divvy up the windfall from Apple’s 13 billion euros tax bill at a closed-door meeting in Slovakia over the weekend.
Some European governments were reportedly more keen on getting their hands on Apple’s money than others, with Germany’s Wolfgang Schäuble saying, “Of course we’re looking into it.”
France, meanwhile, has said it isn’t going to “send in the troops” over the issue, but Austria’s finance minister said France is intrigued by the idea.
The $14.52 billion bill for back taxes was recently handed to Apple after a long-running European investigation, which concluded that the company was taking advantage of illegal state aid that allowed the company to route profits through Ireland. According to the probe, Apple paid a tax rate of as little as 0.005 percent on its European profits in 2014. To put that number in perspective, it’s around $50 tax for every $1 million brought in.
Since Apple was handed its tax bill, both Apple and the Irish government (despite being the country that would benefit from the windfall) have said they will appeal the decision.
In an interview concerning the case, Tim Cook — who has also written an open letter defending Apple’s position — said the demands for more money amounted to “political crap,” and that anti-U.S. bias could be behind the verdict.
Jeroen Dijsselbloem, president of the eurozone’s finance ministers, has struck back by accusing Apple of “[failing] to grasp” the public outcry concerning tax avoidance by multinational corporations.
While I suspect most people are going to struggle to choose the good guys in this story, reports like today’s certainly don’t counteract suggestions that the tax bill was part of a shakedown cash grab.
Who do you think is in the right with the current tax standoff between Apple and the European Union? Leave your comments below.
Source: Politico (paywall)
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
14 responses to “EU governments meet to divvy up $14.5 billion Apple tax windfall”
This is why Apple never had a chance. The EU was never going to deny themselves a big check, regardless of the legality of Apple’s actions.
Apple of course is in the right here. It’s obvious that the fact that Ireland doesn’t want Apple to pay proves that Apple is in the right. And that the EU is looking for ways to spends taxes meant to go to Ireland proves that the EU is wrong.
I don´t know if you are trolling or if this children´s logic reflects your real opinion.
This is called “counting your chicken before they hatch”, or more accurately “counting your chickens before you even have any eggs to hatch in the first place”.
Those EU commissioners and impoverished European nations that are expecting some sort of windfall, are just setting themselves up for a huge disappointment.
They should be using this time to fix their own economies, rather than looking for handouts from other, more economically successful sovereign nations.
You obviously don´t know what´s going on so maybe don´t jabber about things you heaven´t informed yourself about at all.
Of course everybody will get themselves in position if there is a cake to split as huge as this one. But Wolfgang Schäuble also said that he does not expect to see money anytime soon. Maybe that is an important part of his statement.
I really can not understand how anybody but super rich people can side with Apple on this. HOW ON EARTH can anybody think that paying practically NO taxes is good for ANYBODY but Apple. Thanks to Ireland Apple is ALSO not paying tax in the US on most of its earnings!! Apple was and is going above and beyond to avoid paying taxes ANYWHERE. And that is money that should pay for education, for healthcare, for infrastructure, for police and so on …
Big companies avoiding to pay their share (like everybody else) is harmful to every society.
Do you pay more taxes than you need to? Do you say “Oh, government, I feel that by getting a refund I’m taking advantage of you. In fact, here’s 50% of my income instead of 35%!” Everybody pays the government as little as they have to. If the government creates a rule that you can get 20% off your taxes because ________, everybody would take it.
Apples responsibility is to it’s customers, share holders, and employees. It’s Apple’s responsibility to pay what it owes, not to determine what it owes.
It’s the individual countries responsibility to determine what Apple owes. If the government of Ireland creates rules that say Apple only owns a small amount, that’s Ireland’s business. Apple paid as much as they were asked to.
I am sick and tired of this argument. Firstly: Would I go above and beyond to save on taxes? No. Would I create some shady subsidiaries to save taxes? Absolutely not. And if I found out that I pay 0.005(!)% tax while everybody else pays at least 17% I would call the tax office and ask if something is wrong.
Secondly Ireland joined the EU and profited wildly from it. And Apple, too. By Joining the EU, Ireland agreed to the terms of the EU which state that the government must not give unfair tax advantages to single companies. Ireland can still set taxes at their will but they can not favour single companies so. That rule was defined to prevent exactly such practices.
“If I found out that I pay 0.005(!)% tax while everybody else pays at least 17% I would call the tax office and ask if something is wrong.”
So what would you do if the tax office replied: “No, there’s nothing wrong – you don’t owe us any more than you’ve already paid”?
(And your second paragraph seems to be an indictment of Ireland, rather than Apple.)
Actually Tim Cook said that Apple paid Ireland $450 million dollars in tax (almost half a Billion dollars) the same year (2014) that the EU claims Apple only paid 0.005% tax.
If you read the EU’s report, that 0.005% effective tax rate only allegedly applied to one segment of Apple’s Irish revenue stream, not Apple’s entire Irish tax bill for the year as this article and most other reporting sensationalisticaly but incorrectly reports.
You are right, media always exaggerates. But it does not change the fact that Apple still “saved” 14 billion in taxes through trickery and thanks to (pardon me) the stupid irish government. Even more if you count the lapsed years.
Actually, that $14 Billion is the alleged figure for the 11 years between 2003 and 2014, not just for a single year.
Yeah I got that. But Apple also payed too little taxes in the years before that but it is barred.
Considering Apple’s Irish revenue in 2014 alone was $44 billion, for the EU to claim that Apple only still owes 1 year’s worth of that $14b – perhaps $2 billion implies that Apple was in fact paying most of the tax that they owed – not 0.005%.
Otherwise, the EU would be alleging that Apple owed perhaps 25% of that $44b in 2014 which would be $11b just for 2014 alone, not including the 11 years before that.