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Comment Re: U.S. profits too??? (Score 1) 176

I seem to be missing your point, I think. For this case it's irrelevant how "important" Ireland is to Apple (a distinction I'm not sure I understand what you mean by) - what matters is whether the tax regime used by Apple (strictly speaking, the corporate structure that Apple used to move money about) was available to everyone or not. Ireland say it was, the EU say nu-uh.

The EU countries are allowed to compete on tax, and indeed Luxembourg is well known for this. All countries incentivize particular industries in various ways which incentivizes behaviour. Holland levies particularly low taxes on transfers to outside the EU, which Ireland doesn't. Ireland only taxes corporate profits earned inside Ireland, whereas France and Germany only tax corporate profits booked inside their borders. France has a corporation tax rate of 35% that no one actually pays - the rate that was until recently advertised on their industrial development agency's website was somewhere around 6% due to various incentives. The UK is generous around bonuses, whereas all income in Ireland is taxable (if you get a company car, you pay income tax on the value of it - we don't get company cars here).

The thing is that morally, sure, the structure stinks. But legally the EU's case is very, very shaky. For one thing, the .0002 tax rate assumes all global income would be taxed, which is just not true under Irish tax law. For another, Apple requested advice and received clearance from the Irish Revenue Commissioners about this. So it will go to court, and no-one except the lawyers will win, as always.

That said, forget about the common corporate tax base (which is what this appears to be about behind the scenes) but the EU countries should agree a common approach to assess what income is taxable. This would close most of the loopholes that the money is pouring through at the moment, and would appear to be easier to agree on than, say, an EU-wide minimum corporate tax.

Comment Re:EU has no tax powers (Score 1) 176

At the time, there were no other companies. This goes all the way back to 1976 when Ireland had bugger all industry of any kind. To attract investment Ireland offered generous tax levels, generous tax rebates and write-offs, particularly in the area of R&D. Other companies use and have used similar programmes of course (Dell, for instance, took 10 years of generous tax rates and when the deal expired promptly moved all the manufacturing off to Poland or Hungary). It's just that Apple having been here longer, got a larger benefit.

This continues until today, and indeed is used by all countries (we currently incentivize R&D work at >100% tax write off so the more research you do here, the less tax you have to pay).

Comment Re: U.S. profits too??? (Score 2) 176

How is this relevant to either the great-grandparent post (claiming that Apple Ireland was barely a fig leaf because there were so few workers) and my original post (which pointed out that 4,000 people isn't a brass-plate operation)?

Ireland, as it turns out, is important to Apple or they wouldn't base so many people there for so long. Similarly, Google, IBM, Facebook, Intel, Cisco, HP, Eriksson, Analog, Dell/EMV, Microsoft - all the biggest European and American technology firms have substantial operations in Ireland in Dublin, Cork, Limerick, Galway, Leixlip and Athlone. Up until a few years ago they absolutely could have been two guys and a dog, and it wasn't on anyone's hitlist. But all of them employ thousands of people in development, manufacturing, sales, customer support and finance. Hell, Dell moved it's entire 5,000 person EU manufacturing hub out of Ireland and still employs over a thousand people before they bought EMC (which added thousands more).

So it's more than taxes, although that's part of an overall attractive package that includes close cultural ties with America, native English speaking with strong second language skills, and good education.

Comment Re:U.S. profits too??? (Score 2) 176

Doesn't this just end up boiling down to higher effective taxes?

For companies the size and structure of Apple, yes it does, although then they'd move on to more aggressive transfer pricing or something else.

My general sense is that the larger problem isn't paying or not paying taxes, its the cash hoarding these semi-monopoly companies do. A lot of the money just ends up in short-term treasuries or other semi-liquid investment vehicles and doesn't circulate in the economy. In some ways, taxes can be seen as the economic investment of last resort -- a way to bring hoarded capital into the market.

Yes, I tend to agree with this, although the not-paying of taxes is a contributory factor in the cash hoarding .The cash hoards get so large in part because of the tax avoidance. A further factor is the US corporation tax rules, and rates, which are very high.

A better policy would seem to be incentives to spend and not hoard capital so it gets put into motion in the economy.

Easier said than done! Although companies have figured out some ways around this, Apple again being one of the innovators. If they need liquidity in the States that they don't have (because their dragon's hoard is in Barbados) they simply borrow. The cash hoard is collateral, and the interest rates are very, very low because Apple are not a default risk with 200 billion dollars lying about behind the couch. So they have liquidity where they need it without giving up 35% of their money. Apple don't care about their 200 billion being offshore and (technically) inaccessible because there is nothing they want or need to do with it that they can't do out of normal revenue (which they'll probably get a tax break for) or cheap loans.

On a more general point, a further problem is that at the moment, business capital is not in short supply due to the very low interest rates so there's capital looking for opportunities. Historically we can say this is a dangerous situation as this situation can lead to a tendency to inflate stocks which can lead to a bubble/burst situation. Taxes could soak up some of this excess capital and allow it to be spent on the collective in the form of public infrastructure but at the moment it is difficult to tax and business largely have no reason to invest in public infrastructure. So the money is static (as in it is not circulating) and at a time when the US is richer than at any time in its history it has infrastructure problems and those who could be employed in fixing it are idle.

Comment Re:EU has no tax powers (Score 2, Informative) 176

Actually, that's not correct. They're enforcing an agreement that all companies inside a jurisdiction have to be treated the same. If Ireland wanted 0% corporate tax, and applied that to everyone that would be inside the rules. What the Commission decided is that the deal Apple got was an unfair subsidy because no-one else used it. Ireland and Apple say that it was available to everyone, so it wasn't a subsidy and it wasn't unfair.

Comment Re:U.S. profits too??? (Score 5, Informative) 176

The double Irish tax maneuver is worthless on its own without the Dutch sandwich.

The double Irish involves having an Irish registered company legally headquartered elsewhere than the EU (like the Caymans) as well as an Irish registered company headquartered in the EU. This used to be allowed, but it is not allowed any more (and existing structures of this sort have to wind down over the next few years).

There are two components to this. First, the Irish tax is based on where the income is made and only tax Irish income, so do not tax based on income from sales outside the country. This seems reasonable on it's own, but it interacts with other countries tax rules which tax based on where the income is booked. As a result, a company can book profits in Ireland, and fall into the gap between these positions.

The second component is profit moving - the resultant profits can be moved between the resident company and the non-resident company at no (or extremely low) taxes, but moving the money out of the EU to the external HQ would be taxed heavily from Ireland. However, this is not taxed heavily in Holland (due to historical attachments to the Dutch Antilles). So the organization move the money to Holland (inter-EU transfer, low tax), and from that subsidiary to the tax haven (Dutch law, low tax) and then have it in a tax haven for a very low cost. Where they sit on it because the US tax is punishing.

The solution is not higher taxes, it's closing these gaps that companies exploit.

Comment Re:U.S. profits too??? (Score 2) 176

The fact that the Irish branch barely employs any people and is largely just a convenient IP holder makes this even more blatant.

Apple Ireland employs around 4,000 people in Cork, in areas from sales to finance to customer support. It's a major employer in the city and has been for over 30 years, where it used to provide a lot of manufacturing jobs (few of these are left now). The only country in the EU with more Apple employees is the UK, where the number of Apple retail stores (37) explains the difference.

So it's hardly a brass-plate operation.

Comment Re:Yeah, Apple is so happy that Ireland didn't IRE (Score 2) 174

You explicitly penned away the right to do what you're doing here.

The EU maintains that Ireland gave Apple preferential tax treatment that was not available to others and thus amounts to a subsidy which Apple must now repay. We agreed not to give subsidies under EU treaty.

Ireland maintains that we put in place an attractive tax regime available to all to encourage FDI. This is allowed under EU treaty and law, and in fact is used by all EU nations.

So if the EU are right, we get roughly 13 billion in back taxes from Apple. If the EU are wrong (which I believe they are) then we don't. The reason that this is so heated is that it at the edges (Apple were the only company to take advantage of the rules at the start) and there is a worry that this is an overreach by the EU commission which affects the ability of the government to levy its own taxes, which the the countries making up the EU have agreed is up to the individual countries.

Comment Re:Couldnt even push a free samsung 7 on me. (Score 1) 49

Er, what?

S7 has an SD card slot and a headphone jack. The battery is not removable but it is a good sized battery that lasts well. The phone is also waterproof and sturdy, feels solid (if a little slippy) and performs very well. Perhaps you were thinking of the S6 (which had a diabolical battery and no SD card slot)?

Comment Re: it estimates will be worth 250 billion euros (Score 1) 68

Basic misreading of the summary there, old chap (or chapette). The market for Global Positioning services is estimated to be worth 250 billion euro a year by 2020, but this is not the cost of Galileo.

It was budgeted at 3.4 billion euro which turned out to be, er, optimistic - it looks now like it will be somewhere between 5.5 and 7 billion euro (including the running costs for 20 years in that brings it up to ~20 billion). On the flip side, approximately 7% of EU GDP is dependent on satellite navigation worth a total of 800 billion.

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