The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[seafoid]

Thinking about this more, is the EU Commission demanding taxes be paid here that are arguably just as payable in the US? No matter how you look at it, wherever this tax is liable, this isn't really Ireland's money? Would that be fair to say??

Is it now the case that the unelected EU Commission has its own agenda with us on taxation and is happy to embarrass us on the world stage as it pursues its row with large corporations?

Bearing in mind the only time we had leverage during the banking crisis, we never used it, but I think we have massive leverage in Brexit. If ever there was a time to look the EU mandarins straight in the eye and tell them to shove it, surely it is now?

Another part of me does want to kick the large corporations. But I think the EU and the ECB are ahead of them as it is they who keep marching us to the firing line.

90% of Apple's non US profits go through Ireland.
The EC ruling pertains to the Single Market. Can't have special terms for one company

[seafoid]

EU Commission: Spend €64bn on banks
Government: ok
EC: You can't abolish water charges
Gov: ok
EC: Accept €13bn from Apple
Gov: NO WAY!

FF guaranteed the banks and left the country reliant on the kindness of strangers

http://www.ft.com/cms/s/0/afca6780-92e0-11dd-98b5-0000779fd18c.html
The gold medal for selfishness may once more be given to the Irish, who have followed the ingratitude of their No vote on the Lisbon treaty with absolute contempt towards the search for a collective solution to the financial crisis. The European spirit is low and a "European political will" is lacking

The Government is again putting the interest of MNCs before that of the voters

[Jim_Murphy_74]

Thinking about this more, is the EU Commission demanding taxes be paid here that are arguably just as payable in the US? No matter how you look at it, wherever this tax is liable, this isn't really Ireland's money? Would that be fair to say??

It would seem so from the statement.  Basically they are saying it is Ireland's job to collect it but that it is unclear whose money it is.  Apple have paid tax on Irish sales so other EU countries could make a grab for the rest of the takings.

Also if we accept this without some kind of fight, all multi-nationals will have to carry a new liability: 

Regardless of tax paid to Irish Revenue this would set the precedent that European Commission can retrospectively change the bill.  So an acknowledgement from revenue is no longer worth the paper it is written on. 

Regardless of populist nonsense we need to ensure that judgement doesn't create that precedent and if it does we have to fight this one big time.

/Jim.

[Hound]

Statement from the Revenue Commissioners (Brian Cody's brother!):

Speaking today (30/08/2016), after the EU Commission announced its decision in its State aid investigation into the tax treatment of certain Irish branches of Apple companies, Niall Cody, Chairman of the Revenue Commissioners, said that Revenue has cooperated fully with the Commission's investigation.

"We have provided all relevant information and explanations to the Commission. These demonstrate that Revenue collected the full amount of tax due from Apple in accordance with Irish tax law.

The issue of international tax planning, involving mismatches between different countries' tax rules, is well known and is the subject of the OECD BEPS Project."

The Chairman went on to explain that "under Irish tax law, non-resident companies are chargeable to Irish corporation tax only on the profits attributable to their Irish branches by reference to the facts and circumstances. The profits of non-resident companies that are not generated by their Irish branches – such as profits from technology, design and marketing that are generated outside Ireland – cannot be charged with Irish tax under Irish tax law."

Mr. Cody pointed out that Apple has confirmed on the public record that the relevant companies were not tax-resident in Ireland, and went on to say "While I cannot otherwise comment on the specific facts of this case, I can confirm that -
- there was no departure from the applicable Irish tax law by Revenue;
- there was no preference shown in applying that law; and
- the full tax due was paid in accordance with the law."

http://www.revenue.ie/en/press/2016/pr-300816-state-aid-investigation.html

[Jim_Murphy_74]

Statement from the Revenue Commissioners (Brian Cody's brother!):

Speaking today (30/08/2016), after the EU Commission announced its decision in its State aid investigation into the tax treatment of certain Irish branches of Apple companies, Niall Cody, Chairman of the Revenue Commissioners, said that Revenue has cooperated fully with the Commission's investigation.

"We have provided all relevant information and explanations to the Commission. These demonstrate that Revenue collected the full amount of tax due from Apple in accordance with Irish tax law.

The issue of international tax planning, involving mismatches between different countries' tax rules, is well known and is the subject of the OECD BEPS Project."

The Chairman went on to explain that "under Irish tax law, non-resident companies are chargeable to Irish corporation tax only on the profits attributable to their Irish branches by reference to the facts and circumstances. The profits of non-resident companies that are not generated by their Irish branches – such as profits from technology, design and marketing that are generated outside Ireland – cannot be charged with Irish tax under Irish tax law."

Mr. Cody pointed out that Apple has confirmed on the public record that the relevant companies were not tax-resident in Ireland, and went on to say "While I cannot otherwise comment on the specific facts of this case, I can confirm that -
- there was no departure from the applicable Irish tax law by Revenue;
- there was no preference shown in applying that law; and
- the full tax due was paid in accordance with the law."

http://www.revenue.ie/en/press/2016/pr-300816-state-aid-investigation.html

So legally we can't comply with this judgement?  At least without bringing in legislation?

/Jim.

[seafoid]

Thinking about this more, is the EU Commission demanding taxes be paid here that are arguably just as payable in the US? No matter how you look at it, wherever this tax is liable, this isn't really Ireland's money? Would that be fair to say??

It would seem so from the statement.  Basically they are saying it is Ireland's job to collect it but that it is unclear whose money it is.  Apple have paid tax on Irish sales so other EU countries could make a grab for the rest of the takings.

Also if we accept this without some kind of fight, all multi-nationals will have to carry a new liability: 

Regardless of tax paid to Irish Revenue this would set the precedent that European Commission can retrospectively change the bill.  So an acknowledgement from revenue is no longer worth the paper it is written on. 

Regardless of populist nonsense we need to ensure that judgement doesn't create that precedent and if it does we have to fight this one big time.

/Jim.

/Jim

Do you want to benefit from the Single Market or not? You can join the Brits outside if you want.

[seafoid]

Statement from the Revenue Commissioners (Brian Cody's brother!):

Speaking today (30/08/2016), after the EU Commission announced its decision in its State aid investigation into the tax treatment of certain Irish branches of Apple companies, Niall Cody, Chairman of the Revenue Commissioners, said that Revenue has cooperated fully with the Commission's investigation.

"We have provided all relevant information and explanations to the Commission. These demonstrate that Revenue collected the full amount of tax due from Apple in accordance with Irish tax law.

The issue of international tax planning, involving mismatches between different countries' tax rules, is well known and is the subject of the OECD BEPS Project."

The Chairman went on to explain that "under Irish tax law, non-resident companies are chargeable to Irish corporation tax only on the profits attributable to their Irish branches by reference to the facts and circumstances. The profits of non-resident companies that are not generated by their Irish branches – such as profits from technology, design and marketing that are generated outside Ireland – cannot be charged with Irish tax under Irish tax law."

Mr. Cody pointed out that Apple has confirmed on the public record that the relevant companies were not tax-resident in Ireland, and went on to say "While I cannot otherwise comment on the specific facts of this case, I can confirm that -
- there was no departure from the applicable Irish tax law by Revenue;
- there was no preference shown in applying that law; and
- the full tax due was paid in accordance with the law."

http://www.revenue.ie/en/press/2016/pr-300816-state-aid-investigation.html

The issue is the rate. Who set the rate of 1%
The Government is completely exposed on this. You can't take part in a single market and give preferential treatment to certain companies

[weareros]

Thinking about this more, is the EU Commission demanding taxes be paid here that are arguably just as payable in the US? No matter how you look at it, wherever this tax is liable, this isn't really Ireland's money? Would that be fair to say??

It would seem so from the statement.  Basically they are saying it is Ireland's job to collect it but that it is unclear whose money it is.  Apple have paid tax on Irish sales so other EU countries could make a grab for the rest of the takings.

Also if we accept this without some kind of fight, all multi-nationals will have to carry a new liability: 

Regardless of tax paid to Irish Revenue this would set the precedent that European Commission can retrospectively change the bill.  So an acknowledgement from revenue is no longer worth the paper it is written on. 

Regardless of populist nonsense we need to ensure that judgement doesn't create that precedent and if it does we have to fight this one big time.

/Jim.

/Jim

Do you want to benefit from the Single Market or not? You can join the Brits outside if you want.

We can't have it both ways. The benefits of being a multinational tax haven with our own tax laws enable us to have these companies on our shores providing good IT jobs. If we are going to collect high taxes for our masters in Europe on rev earned elsewhere then these non-Irish companies will set up elsewhere. The U.K is already flashing eyes their way.

[Jim_Murphy_74]

Do you want to benefit from the Single Market or not? You can join the Brits outside if you want.

My understanding of a Single Market doesn't include EU commission either

• Setting tax laws for member states
• Unilaterally telling a member stated they haven't implemented their laws

So firstly we need to find out which of the above they are doing and if they legally can do that.

Secondly if they can do either, then we have to process for this and it must be timebound.

Otherwise any company, in any EU state must indefinitely carry an unknown liability on their books, in case the EU decides to retrospectively change their tax bill for an arbitrary number of years.

If the EU single market means the above, it won't be me or Ireland that wants out, it will be every state.

/Jim

[seafoid]

Do you want to benefit from the Single Market or not? You can join the Brits outside if you want.

My understanding of a Single Market doesn't include EU commission either

• Setting tax laws for member states
• Unilaterally telling a member stated they haven't implemented their laws

So firstly we need to find out which of the above they are doing and if they legally can do that.

Secondly if they can do either, then we have to process for this and it must be timebound.

Otherwise any company, in any EU state must indefinitely carry an unknown liability on their books, in case the EU decides to retrospectively change their tax bill for an arbitrary number of years.

If the EU single market means the above, it won't be me or Ireland that wants out, it will be every state.

/Jim

Jim they wouldn't have to carry a liability. It would be a credit.
Ireland's rate of corp tax is 12.5%. Not 1%.
Pandering to tax avoidance so Apple can fund buybacks is not coherent.

[Hound]

The issue is the rate. Who set the rate of 1%
The Government is completely exposed on this. You can't take part in a single market and give preferential treatment to certain companies

There is no 1% rate seafoid.

Profits that arise as a result of Irish activities are taxed at 12.5%

Profits from technology, design and marketing that are generated outside Ireland are taxed wherever the company that owns such technology, etc. is tax resident. That turned out to be a 0% location. Those profits will be subject to 35%+ US tax when remitted to the US (so Apple keeps the cash offshore and avoids bringing it back to the US - probably hoping for another US amnesty on such profits). The US tax authorities allowed Apple to transfer that technology from the US to a company that was not tax resident anywhere.

All Ireland can do is tax profits that are within the charge to Irish tax - and they always tax such profits at 12.5%

[seafoid]

The issue is the rate. Who set the rate of 1%
The Government is completely exposed on this. You can't take part in a single market and give preferential treatment to certain companies

There is no 1% rate seafoid.

Profits that arise as a result of Irish activities are taxed at 12.5%

Profits from technology, design and marketing that are generated outside Ireland are taxed wherever the company that owns such technology, etc. is tax resident. That turned out to be a 0% location. Those profits will be subject to 35%+ US tax when remitted to the US (so Apple keeps the cash offshore and avoids bringing it back to the US - probably hoping for another US amnesty on such profits). The US tax authorities allowed Apple to transfer that technology from the US to a company that was not tax resident anywhere.

All Ireland can do is tax profits that are within the charge to Irish tax - and they always tax such profits at 12.5%

via FT

Apple has designed its structure so that its lightly-taxed Irish companies do not have a taxable presence — or "permanent establishment" — in the countries where it sells its goods. This type of structure has come under intensifying scrutiny from tax authorities which argue it is used to shift profits abroad.

The question is whether this is appropriate in the Single market

[Jim_Murphy_74]

Jim they wouldn't have to carry a liability

If they do tax returns each year, they can't regard them as closed because the revenue say so. At any time the European Commission can say returns are wrong and order a retrospective payment.  How is that not a liability?

/Jim.

[Hound]

The issue is the rate. Who set the rate of 1%
The Government is completely exposed on this. You can't take part in a single market and give preferential treatment to certain companies

There is no 1% rate seafoid.

Profits that arise as a result of Irish activities are taxed at 12.5%

Profits from technology, design and marketing that are generated outside Ireland are taxed wherever the company that owns such technology, etc. is tax resident. That turned out to be a 0% location. Those profits will be subject to 35%+ US tax when remitted to the US (so Apple keeps the cash offshore and avoids bringing it back to the US - probably hoping for another US amnesty on such profits). The US tax authorities allowed Apple to transfer that technology from the US to a company that was not tax resident anywhere.

All Ireland can do is tax profits that are within the charge to Irish tax - and they always tax such profits at 12.5%

via FT

Apple has designed its structure so that its lightly-taxed Irish companies do not have a taxable presence — or "permanent establishment" — in the countries where it sells its goods. This type of structure has come under intensifying scrutiny from tax authorities which argue it is used to shift profits abroad.

The question is whether this is appropriate in the Single market

You've moved on to a completely different point now.

Most US groups will set up a European sales principal company, in Ireland or UK or Netherlands or Switzerland or Belgium or somewhere else.

In Apple's case they chose Ireland and so route all their sales through Ireland (as do so many US MNCs located in Ireland). They pay their subisidaries in Europe a commission for any sales in their country. The European subs are guaranteed a relatively small fixed profit (a % of sales or a % of costs), take no risks, and make virtually no important decisions.

Whether this is approrpriate in a Single Market going forward is a question that is currently under review. But in that past these arrangements have been done under OECD principles, many of the main members of the OECD being the big countries in Europe. They set those rules, not Ireland, not the US multi-nationals. 

[Declan]

Nobel prize winning economist Prof Joseph Stiglitz says the Irish government is wrong to appeal the EU decision on Apple and its tax obligations.
He described comments by Minister Richard Bruton on RTE's Today with Sean O'Rourke Show, in defence of the government's position, as 'utter balderdash.'
On the same programme Prof Stiglitz said: "the fact is that you were encouraging tax avoidance, you knew it.
"Let's not make any pretence about it, you got a few jobs at the cost of stealing revenues from countries around the world. That's the kind of activity that has to be stopped."
He said that the question now was: "what are the rules of the game about tax competition, about state aid and it's very clear if a company says that they got revenue associated with Ireland, you have to pay a tax on it.
"Whether that income was correctly attributed to Ireland is another matter. If Apple is saying that this is Irish income, you have an obligation to impose taxes on income that they say originated in Ireland.
"Apple is claiming that the income was associated with activities, that's why they said they could book it to an Irish subsidiary. Can they book it to a subsidiary for activities not occurring in Ireland? The issue is, if they book it to Ireland should there be an Irish tax?
"That's what the issue is. They were booking it to an Irish subsidiary and they were not paying taxes."
Prof Stiglitz said he found it mystifying that Ireland didn't "just pocket that €13billion and use it for the enormous hardship that the people of Ireland have had to face.
"The argument that you will lose lots of jobs is absolute nonsense. It's a new world, it's very clear that the rules of the game have changed, under those new rules Ireland will have to compete on the basis of going forward, what it can provide economically.
"I think Ireland can provide a lot - it has a well trained labour force, a disciplined labour force, and that is the basis on which countries should compete, with infrastructure.
"This idea that all these people will leave and their jobs will disappear is a vote of lack of confidence in Ireland. I'd rather have a vote of confidence in Ireland and say, maybe a few people engaged in cheating, relatively few, but nothing to compensate for the loss of the €13billion."