Tuesday, August 30, 2016

Apple in Ireland: 50 euros in taxes for a million euros profit – SPIEGEL ONLINE

Little time? End of the text there’s a summary.

So now Apple: The EU Commission in their fight against against tax breaks for big corporations against Ireland, thereby integrating the iPhone maker from California to. Unlike other companies it is in this case a lot of money: Up to 13 billion euros Apple has thus saved by Conning, the Irish Government should from recovering the money now

This is based Margrethe Vestager.. The EU Competition Commissioner takes the big corporations before: After Starbucks, Fiat Chrysler, soon probably McDonald’s, the Dane now dares the attack against the powerful US group

Why is the EU. -Commission against Apple before?

More than two years has the Commission examined whether the Irish government Apple treated for tax purposes differently from other companies. as applicable in the EU a favor as unlawful State aid, as well as direct subsidies for companies or tax exemptions such as those granted by Germany in the EEG apportionment energy-intensive companies. “Illegal government support distort competition and therefore the business,” argues Vestager.

In such cases, the Commission opens proceedings and demanded repayment of the benefits.

According to the EU Commission is the Apple of the case: the Irish tax rate of the iPhone maker was thus in 2003 only one percent and decreased by 2014 to 0.005 per cent – 50 Euro taxes on one million euro profit. “If my tax rate would drop to 0.005 percent,” EU Competition Commissioner Vestager commented, “I had the feeling that I should check my tax bill again.”

How did Apple’s tax dodge?

Apple has since the eighties, two subsidiaries in Ireland, Apple Operations Europe and Apple Sales International. The latter is responsible for the sales, buying Apple products from manufacturers and sells them to customers in Europe, the Middle East, Africa and India. All profits from these transactions run on the Irish company. Part of it – in 2011 as there were about two billion dollars – goes quite legally to the US parent, as subsidies for research and development

The European Commission criticized the passthrough of the remaining profits within Ireland.. Particularly critical sees so-called tax advance decisions: The Company apply in advance a review of their plans. Although this is legal, but is problematic when tax authorities so that individual companies grant special conditions.

From the European Commission view that was at Apple the case. Accordingly, Apple Sales International transferred for example in 2011, the equivalent of approximately 16 billion euro profit almost entirely to administrative centers, so-called head offices that were established neither in any country still had its own staff. Only 50 million euro profit were taxed in Ireland. Similarly, it was therefore in the second Apple Operations Europe.

These companies design, the “nature or economically justified” recorded in EU Commission, had been approved by the Irish Revenue Commissioners – a breach of EU state aid rules, because other companies did not have this possibility. Competition Commissioner Vestager has however made clear that the Commission neither the general taxation system in Ireland still as such agency with domestic corporate tax rate or the tax structure of Apple in Europe in question.

Who drives the money? ‘ / b>

The EU legislation provides that unlawful aid must be recovered in order to eliminate a distortion of competition – penalties do not exist. In the case of Apple, it’s loud Vestager to tax payments of up to $ 13 billion plus interest. The Commission took into account only the period from 2003, because until 2013, the first investigation had been initiated and aid may be recovered from this point on a decade – since 2015 pays Apple in Ireland regularly taxes.

The Irish government wants to defy instructions and considers to have Apple makes no tax benefits. However, could be other countries where the Irish Apple daughters were active, use the findings of the European Commission: Should they be of the opinion that Apple’s taxes would actually in their respective countries have to pay, they could also be additional claims for part of billion repayment questions.

Apple immediately announced, to appeal. General Counsel Bruce Sewell described the EU Commission proceedings as “grossly unfair”. Sewell was confident to win a court case, there would be but “drag expected for several years.” In an article published on the Internet letter wrote Apple CEO Tim Cook, the European Commission had a trial started “rewrite history of Apple in Europe to ignore the Irish taxation law and thereby tilt the international tax system.”

existence Threatening the demand for Apple, however, is not: the iPhone Group is currently sitting on cash reserves of more than 200 billion euros – and the stock price  chart show responded to the tax claim hardly.

in summary: The European Commission has condemned Ireland to require further from Apple’s Irish subsidiary companies tax of up to 13 billion euros plus interest. The US group had forwarded the profits to administrative centers that were not registered in any country and no employee had, thus reducing its tax burden up to 0,005 percent. Both Apple Ireland intend to proceed against the decision.


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