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EU state aid is not the right tool to fight tax avoidance

Discussion in 'Off-Topic' started by really, Sep 2, 2016.

  1. really

    really Deity

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    https://www.theguardian.com/technology/2016/sep/01/eu-state-aid-tax-avoidance-apple
    The European Commission has over stepped it's authority by declaring compliance with tax law to be illegal state aid.

    The competition commissioner has acted as judge and jury by declaring that Apple received illegal state aid from Ireland by exploiting loopholes in Irish and international tax law.

    The Irish government and Apple reject this.

    It is a political witch hunt and I expect it will be thrown out on appeal.
     
  2. bathsheba666

    bathsheba666 Fast 'n Bulbous

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    Any attempt to bring corporations under control is welcome.

    I hope it is not thrown out on appeal, and corporations have to start paying their fair share of tax, instead of merely what they can 'legally' get away with.
     
  3. Lillefix

    Lillefix I'm serious. You can.

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    I don't know the details but the commentators I've seen have praised this decision.
     
  4. GoodSarmatian

    GoodSarmatian Jokerfied Western Male

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    Hmm, the first sentence of the article is already a fallacy.

    That's not a "rather than" thing. We should do both. Multinational corporations have been making billions in profits without paying taxes and they certainly were not above legalistic trickery. It's about time to put a stop to it. I hope the EU doesn't cave under pressure from the US.

    The good news for Apple is that they won't have to pay any back taxes in Germany because their German headquarters is in Bavaria and Bavaria is run by pond scum.
     
  5. Oerdin

    Oerdin Deity

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    The claim that a country lowering it's tax rate to be more competitive is somehow illegal or a subsidy (cash given by the state to a company) is hogging wash.
     
  6. Cheetah

    Cheetah Deity

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    It is a good decision. And as far as I know, it's also legally sound...

    If Ireland has a tax law which favours certain companies or company structures, then that is state subsidies. Which is illegal according to EU rules.
     
  7. warpus

    warpus In pork I trust

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    Good on the EU for making Apple pay their fair share of taxes.

    I would stop buying Apple products if they weren't so pretty and shiny and if work didn't help me pay for them.
     
  8. bathsheba666

    bathsheba666 Fast 'n Bulbous

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    In any situation and country where a company is paying a lower tax rate than its employees one can't help speculating on how much thinly veiled corruption is occurring.
     
  9. civvver

    civvver Deity

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    It's cus the US is trying to push for a better trade deal and EU is using this to muscle them.

    It also does almost nothing to apple but rather to the US, as they'll get a tax break for paying foreign tax, a 1to1 deduction afaik.

    https://www.washingtonpost.com/news...he-bill-for-apples-14-5-billion-tax-judgment/

    In other words the EU is basically sticking it to the US, not the apple specifically. Which is all fine and dandy but you didn't hear anyone whining about it when they were getting well paid tech jobs setup in ireland.

    http://www.newyorker.com/business/c...reate-irelands-economies-real-and-fantastical
     
  10. Zelig

    Zelig Beep Boop

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    Good thing nobody is making that claim.
     
  11. warpus

    warpus In pork I trust

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    Not directly. The EU shouldn't care what sort of tax laws other countries have.
     
  12. really

    really Deity

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    This will be the key point when it will be appealed and why the appeal will probably win.
    The loophole was available to others and wasn't specific to Apple.

    Low corporate taxes (and high personal taxes) was a trade off made long ago to encourage employment. And it has worked.
     
  13. GoodSarmatian

    GoodSarmatian Jokerfied Western Male

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    You think this is about TTIP ?
    That's not impossible, but it's pretty unlikely. The US government already wants TTIP much more than the EU does.
    Popular opinion is overwhelmingly against it, the French government seems to be against it, and even our vice chancellor more or less called the treaty dead.
    The European Commission announced a year ago that it's planning to take action against tax avoidance, but since it's headed by Jean-Claude Juncker -who himself "negotiated" an odious tax deal with Amazon while he was prime minister of Luxembourg- nobody expected anything to actually happen (which still might be the end result). I'm pleasantly surprised that the announcement wasn't just hot air (which it still might turn out to be).

    As for lost US Tax revenue, that's on your laws. The EU doesn't force the US government to give any tax credits to multinational corporations.
     
  14. GoodSarmatian

    GoodSarmatian Jokerfied Western Male

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    Yes, I remember people raving about Ireland's business friendly environment and rapid economic development.
    Until the 2008 crisis and the 2010 bailout.
     
  15. really

    really Deity

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    Things are looking up again. Unemployment is falling, growth is back.

    Problems of growth are re-emerging - housing shortages, traffic congestion, skills shortages.
     
  16. Cheetah

    Cheetah Deity

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    What is the loophole in question actually? I haven't read up on the details of the case.
     
  17. Takhisis

    Takhisis brown-haired beauty

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    Somehow they ended up paying (according to the Beeb) less than 1% tax when other companies elsewhere in the EU pay 30% or a similar number.
     
  18. Old Hippy

    Old Hippy Deity

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    except that's not what happened. Apple has paid an effective tax rate of 0.005%-1% there on all European profits ( and Australian too, let alone other countries) by using a tax subsidy not available to ALL other companies, before the profits are shipped to the Cayman Islands. if Eire wanted too give Apple 14.5 billion dollars as a gift they are entitled to. tho I think they would be a change of government if they did so.
    other countries would still block it as being anti-completive to their markets

    they could also lower their corporate tax rate to 1 % for all companies instead of keeping it at around 12.5% or withdraw from the EU
    apple could also take their profits back to the US.

    it is similar to you being told to pay double tax lets say 30%, while your neighbour is told they only have to pay 1%.
    you would see that as hogging wash
     
  19. Takhisis

    Takhisis brown-haired beauty

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    The chancellor of Austria complains of a similar situation happening in his country.
    Amazon and Starbucks 'pay less tax than a sausage stand', Austria says

    Centre-left politician also criticises Google and Facebook and complains that EU states with low-tax regimes have lured multinationals


    Multinational companies including Amazon and Starbucks pay less tax in Austria than one of the country’s tiny sausage stands, the republic’s centre-left chancellor lamented in an interview published on Friday.

    Chancellor Christian Kern, head of the Social Democrats and of the centrist coalition government, also criticised internet giants Google and Facebook, saying that if they paid more tax subsidies for print media could increase.

    “Every Viennese cafe, every sausage stand pays more tax in Austria than a multinational corporation,” Kern was quoted as saying in an interview with newspaper Der Standard, invoking two potent symbols of the Austrian capital’s food culture.

    “That goes for Starbucks, Amazon and other companies,” he said, praising the European Commission’s ruling this week that Apple should pay up to €13bn ($14.5bn) in taxes plus interest to Ireland because a special scheme to route profits through that country was illegal state aid.

    Apple has said it will appeal against the ruling, which CEO Tim Cook described as “total political crap”. Google, Facebook and other multinational companies say they follow all tax rules.

    Kern criticised EU states with low-tax regimes that have lured multinationals – and come under scrutiny from Brussels. “What Ireland, the Netherlands, Luxembourg or Malta are doing here lacks solidarity towards the rest of the European economy,” he said.

    He stopped short of saying that Facebook and Google would have to pay more tax but underlined their significant sales in Austria, which he estimated at more than €100m each, and their relatively small numbers of employees – a “good dozen” for Google and “allegedly even fewer” for Facebook.

    “They massively suck up the advertising volume that comes out of the economy but pay neither corporation tax nor advertising duty in Austria,” said Kern, who became chancellor in May.​
     
  20. EnglishEdward

    EnglishEdward Deity

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    This is hilarious. Only in Eire could the government sue not to receive billions in taxes.
     

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