Jeroen Dijsselbloem, president of the eurozone’s finance ministers, has accused Apple of “[failing] to grasp” the public outcry concerning tax avoidance by multinational corporations.
He was referring to last week’s landmark decision, which handed Apple an enormous tax bill of 13 billion euros ($14.52 billion), based on its supposed underpayment of taxes in the Republic of Ireland. Apple paid a reported 0.005 percent tax on its European profits in 2014.
The past week has been one to forget for both Apple and Samsung. While Cupertino was handed a hefty tax bill by the European Commission, Sammy has had to recall every Galaxy Note 7 unit sold so far for fear of them exploding.
But which one will be most damaging, and which will quickly be forgotten? Apple’s tax fight is sure to rage on for months, but will faulty phones leave a bad taste in the mouths of Samsung fans a lot longer?
Join us in this week’s Friday Night Fight as we discuss the sad start to September for Apple and Samsung.
The Irish government will lodge a formal appeal with the European Commission over the enormous tax bill of 13 billion euros ($14.52 billion) handed out to Apple earlier this week.
Tim Cook says that Apple is among the biggest Irish taxpayers, and claims anti-U.S. bias is “one reason” the company was targeted by the European Commission.
Cook was responding to this week’s news, in which Apple was handed an enormous tax bill of €13 billion ($14.52 billion) after an investigation into its reportedly illegal “sweetheart deal” in Ireland, giving it an unfair advantage over rivals.
With his open letter defending Apple’s Irish tax strategy, Tim Cook positions his company as a sledgehammer-tossing freedom fighter at battle with Big Brother-style EU bureaucracy.
But unlike Cook’s previous missives on LGBT rights and the importance of privacy, this open letter seems unlikely to be met with near-unanimous support. While railing against the EU’s massive assessment of €13 billion euros in back taxes owed by Apple, Cook ignores the facts of the matter — and seems tone-deaf about painting the world’s biggest company as an underdog.
Tim Cook has written an open letter addressing Apple’s enormous tax bill, arguing that the European Union’s demand for €13 billion ($14.52 billion) in unpaid back taxes will have a “profound and harmful effect” on “investment and job creation in Europe.”
At present, Apple employs close to 6,000 people in Ireland, as well as “sustaining” 1.5 million jobs across Europe — including those at Apple and other manufacturers, developers and suppliers who rely on it.
The verdict’s in on Apple’s European tax investigation, and the company has been handed a massive 13 billion euros ($14.52 billion) bill for unpaid back taxes in the Republic of Ireland.
The order was made by European Union competition officials, who ruled that Apple was taking advantage of illegal state aid that allowed the company to route profits through Ireland.
Apple’s decision to hold $216 billion out of its total $232 billion fortune overseas amounts to a “fraud,” claims Nobel economist Joseph Stiglitz.
Stiglitz, who is advising Hillary Clinton’s presidential campaign, said that there is something “obviously deficient” about U.S. tax laws which make this a possibility — and singled Apple out as one such beneficiary.
Even bringing Apple’s sizable cash pile back to the U.S. wouldn’t stop the E.U. from investigating the company’s Irish tax arrangements, claims E.U. competition commissioner Margrethe Vestager.
“Whether or not Apple wants to repatriate part of their un-repatriated profits is purely up to Apple and is of no concern [to] our case work,” she told reporters after a recent meeting in the U.S. with the Obama administration.
Apple has spoken up about the European Union investigation into its Irish tax affairs, telling a panel of E.U. investigators that it pays “every cent of tax” it owes in the country, and that it gets no advantage whatsoever compared with other companies.
Apple will join multinationals Google, McDonald’s and IKEA in defending its European tax deals against E.U. lawmakers this Wednesday.
The hearing concerns whether or not giants like Apple are receiving illegally favorable tax deals, which give them an unfair advantage over local businesses.
Despite the noise being made about big multinationals using loopholes to avoid paying tax, Apple’s Chief Financial Officer Luca Maestri has made it clear how much he thinks Apple owes as part of the European Union’s ongoing investigation.
“My estimate is zero,” he told the Financial Times. “I mean, if there is a fair outcome of the investigation, it should be zero.”
Don’t spend it all at once, E.U.!
Apple’s tax situation in Europe is currently the subject of an E.U. investigation — and public opinion hasn’t been helped too much by Google recently agreeing to pay what many view as a derisory sum of £130 million ($185m) in U.K. back taxes for the past ten years.
But Cupertino has an unexpected champion in the form of tousle-haired London mayor (and possible next Prime Minister) Boris Johnson. Kind of.
Apple could find itself on the receiving end of a hefty $8 billion bill for back taxes as a result of the current European Commission investigation into its tax policies, according to a new report from Bloomberg Intelligence.
If the Commission decides to enforce a tougher accounting standard on Apple, the company may owe taxes at a 12.5 percent rate on the roughly $64.1 billion in profit it generated from 2004 to 2012.
Having previously said that he expected to receive the European Commission’s verdict on Apple’s Irish tax arrangements by Christmas, Ireland’s Finance Minister Michael Noonan now claims that an announcement is likely to be delayed util next year.
The delay in the long-running investigation is the result of regulators asking for additional information from the Irish government, which will take several weeks to gather.
Apple has announced plans to hire an extra 1,000 employees in Ireland — as the deadline draws closer concerning the European Union announcing their decision about whether or not Apple dodged taxes thanks to the Irish government.
Apple will add 1,000 staff to its offices in Cork by mid-2017, where it currently operates the only Apple-owned manufacturing facility in the world, building Mac computers.
Apple’s tax practices in Europe have been the subject of investigation for some time now. However, European Union regulators say they’ll finally have a conclusion as to the question of whether Apple benefited from “illegal tax sweeteners” by the end of this year.
According to Ireland’s finance minister Michael Noonan, the decision will be announced, “between now and Christmas.”
Preliminary findings by the European Commission have slammed Apple and Ireland for a so-called “sweetheart” tax deal which allowed Apple to avoid paying taxes by building up a massive offshore cash pile of $137.7bn in the country.
The deal dates back to 1991, and allowed Ireland to provide Apple with illegal state aid. Apple has had a base in the country since 1980.
In a statement, the European Commission said that “the Irish authorities confer an advantage on Apple,” and that this “advantage is obtained every year and ongoing.”
Regulators are set to break down the reason tax deals given to Apple in Ireland violate EU laws, according to people familiar with the matter.
The European Commission began formal investigations into the tax avoidance issue back in June, and plans to publish its findings as early as today — with the claim that tax deals between Apple and the Irish government could fall under the heading of illegal state aid.
While Apple has yet to make a comment on the matter, the Irish government has spoken up; describing its position as “confident” that the Apple deal represents “no breach of state-aid rules.” It claims that it has already submitted a formal response to the European Commission, in which it addresses in detail “the concerns and some misunderstandings.”
Apple has a massive pile of cash sitting overseas and the U.S. Senate is now weighing options on how to entice Cupertino to bring all $138 billion of it back to American soil.
Senate Democrats and Republicans are reportedly in discussions about passing legislation that would give American companies like Apple and Google a one-time tax break if they repatriate profits stashed overseas.
Apple paid just 3.7% tax on its non-U.S. income last year — and the European Commission isn’t happy about it.
Registering its overseas business in Ireland, Apple is one of three companies being investigated for abusive transfer pricing and other forms of corporate profit shifting, with the other two being Starbucks and Fiat Finance and Trade.
The subject of corporate tax avoidance has become an increasingly hot-button issue in recent years, as the result of probes into international businesses like Apple and Google, which use convoluted structures as a means of slashing their tax bills.
Following a change to VAT (value added tax) legislation in the United Kingdom, there have been a lot of reports suggesting that Apple customers in the U.K. may soon have to pay more when buying from iTunes and the App Store.
As it turns out, those reports are likely incorrect.
You see, Apple has been charging Brits 23% VAT on digital content until now — but the U.K. VAT rate is only 20%.
An Irish parliamentary committee has dismissed the opportunity to grill Apple and Google over their tax affairs in Ireland, despite requests for a change to the way in which it taxes large multinationals that do business in its country.
The move comes weeks after Apple and Google came under scrutiny for the way in which they use tax “loopholes” or “gimmicks” to avoid paying excessive taxes on international sales. It was revealed that Apple used an Irish subsidiary with zero employees to pay less than 0.05% tax on $78 billion over four years.
Apple has received a lot of heat from the U.S. Senate lately regarding its international tax practices and off-shore cash, and you can now add Apple co-founder Steve Wozniak to the list of Apple tax dissenters.
Woz said that he doesn’t think Apple’s tax practices are really fair, and suggested that Apple, and other large firms, be taxed on their income.
In an interview with the BBC, Woz had the following to say regarding Apple’s tax practices:
We’ve already brought you some of the most interesting topics that came up during Tim Cook’s interview at D11 last night, but if you’d like to watch the entire thing yourself, you can do so right now. AllThingsD has posted the entire thing — which runs for one hour and 20 minutes — online this morning, and you can watch it below.
