What actually happened between IE and AAPL is on the verge of extortion and bribery - the only difference is not on personal level but on Gov vs Bus.
We should heavily penalise this, as AAPL literally stole money from both US and EU people. Because of this arrangement: Apple paid less taxes in US, hence US people have worse roads, healthcare etc. To the same in EU (but here by bad IE decision). Money taken is on AAPL accounts now.
Long story short:
Apple promised IE to incorporate there, to do a lot of business through IE, to open job positions. In exchange they asked for low special tax. They also said: if no low tax for us, we will do all this things in different country.
Questions:
1. how far is this from extortion? Should we allow this?
2. did IE gov make a good decision (14mld is of lesser value than apple benefits given to IE) ?
3. why this was decided non publicly?
4. should we allow corpos to make such decisions (dodge taxes) ?
Companies make deals with governments __all the time__ for tax breaks and government subsidies. Governments want jobs and investment, companies want the best deals they can get.
This is NOT extortion or bribery, just everyday business. It happens every single day even between US states, not to mention nation-states. Business is competitive and that's a good thing.
AAPL in this case has deferred taxes on profits with their structural arrangement, NOT avoided them. To call it theft is extremely ignorant of how taxes and governments work.
> Companies make deals with governments __all the time__ for tax breaks and government subsidies. Governments want jobs and investment, companies want the best deals they can get.
And it's honestly one of the bigger problems of the world today. There was a Planet Money episode where they presented the data from jobs "created" in Kansas and Missouri through tax breaks. It was something like: Kansas stole 5000 jobs from Missouri through relocation of offices in Kansas City, and Missouri stole 4000 jobs from Kansas the same way. So millions offered to companies to get a net benefit of basically zero.
It is a problem but unfortunately not a solvable one.
It's the equivalent of paying everyone the same wage. Countries are going to aggressively compete for talent just like companies do. And whether it's offering them different tax rates, amending employment laws, building infrastructure for them etc countries are going to bend over backwards.
While you might be right in the US (I don't know), it is illegal to have fiscal deals with the government in the EU, which is the very ground for the court action in the first place.
From my perspective (as a EU citizen), it is the right thing to do (no allowing special deals). How is that a fair landscape for competition? It's not. If you want to do business in the EU, you have to obey EU laws, just like everybody else.
Furthermore, government officials agreeing to tax cuts should be tried for abuse of public assets, in my opinion. That's however a separate issue in this case, Apple does no obey EU law no matter how guilty politicians are.
Yes, it happens very often in EU countries too, and because of that the EU has very strict rules what sort of help is allowed, to stop countries undercutting each other and racing to the bottom.
How can governments "make deals" with individual companies? Aren't governments making laws and the laws apply to everyone?
Giving a tax break to some specific kind of company (e.g plumbers or taxi companies) sounds dubious but doable.
To my ears this just sounds like the Irish government tried to "make a good deal" with Apple, but the law doesn't allow it. Which sounds obvious.
It feels like a clash of company and government culture: the US one where companies try to get "deals" from states in return for doing business there, and the European one where they can't.
Laws apply to everyone, but are selectively enforced. This is why this story is about Apple, and not some no-name mom-and-pop shop that is in equal violation of the law.
The laws are designed to make the extortion impossible. If one state isn't allowed to undercut another for an individual company then the "or we'll take our business elsewhere" question isn't possible.
>The laws are designed to make the extortion impossible. If one state isbn't allowed to undercut another for an individual company then the "or we'll take our business elsewhere" question isn't possible.
Those are EU laws. Apple could have taken their business anywhere else, including outside EU where such laws don't apply, and a country could undercut Irish taxes.
That said, I'm not against an international agreement to prevent that (though I don't think most countries will be willing to sign it, as they lose their negotiating advantages compared to other countries, and no companies would prefer them all other things being equal).
Agreed, to me much of the point of the EU is ensuring countries don't undercut eachother on product safety, environmental regulation, tax laws etc.
Ideally these things would be regulated in global agreements too, but that's harder to achieve.
I'm fine with Apple moving all of their business to China to dodge high taxes in the EU.
> Apple could have taken their business anywhere else, including outside EU where such laws don't apply, and a country could undercut Irish taxes.
Yes, Apple could do that. But then they'd have to pay EU customs and other costs that aren't applicable when you do business inside the EU. They choose to be inside the EU for a reason, and they should pay accordingly.
Hollywood interests managed to get employment law changed in New Zealand. The law. They didn't even remotely try to hide who was doing it, either. The sad truth is, it probably actually is good for our economy.
Apple did not "literally steal money" nor did they "extort or bribe" anyone. Both of those are criminal offences and people would be going to jail. Nobody who is looking at this through a reasonable, mature lense would ever resort to cheap hyperbole.
And you are completely wrong to say that this decision resulted in Apple paying less taxes in the US. They paid less taxes in Ireland not the US.
>> as AAPL literally stole money from both US and EU people
Well you have US Govt now arguing on behalf of Apple, which suggests that US people were not going to be the losers.
The losers are people of other countries where Apple and other MNC's don't pay their fair share of taxes.
The plan is to hoard this money in low tax jurisdictions and I guess for 2 purposes
1. wait for a lower tax rate amnesty to be offered in US
2. use cash hoard to undertake overseas acquisitions to grow the US Company and by extension US influence.
Apple finds it better to take loans out in US for its cash needs there and write them off against US incomes inspite of sitting on more than 100b in cash reserves.
We should heavily penalise this, as AAPL literally stole money from both US and EU people. Because of this arrangement: Apple paid less taxes in US, hence US people have worse roads, healthcare etc. To the same in EU (but here by bad IE decision). Money taken is on AAPL accounts now.
Long story short: Apple promised IE to incorporate there, to do a lot of business through IE, to open job positions. In exchange they asked for low special tax. They also said: if no low tax for us, we will do all this things in different country.
Questions: 1. how far is this from extortion? Should we allow this? 2. did IE gov make a good decision (14mld is of lesser value than apple benefits given to IE) ? 3. why this was decided non publicly? 4. should we allow corpos to make such decisions (dodge taxes) ?