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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Fri Sep 02, 2016 4:12 pm 
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FreeFallin wrote:
So the Irish State, on behalf of the taxpayers of the country, may pay the fine on Apples behalf ...bailing out Apple so to speak as we did with the Banks :x

Not that bad (I think).

My understanding is that the State has to support Apple (or these written agreements can interprit anything other then full State support, as being the State undermining Apple).

These agreements were to protect Apple against a SF scenario, where a new Government goes 'hostile' on Apple and, by direct or indirect means, undermines Apple's EU tax avoidance scam.

As I understand it, the State did not underwrite or guarantee the performance of Apple's EU tax avoidance scheme. If (when) the politically-driven ECJ overturn Apple's appeal, the Irish State should not liable for any of Apple's €19bn total EU fine.

Of course, when Apple is begging the Irish State to accept the €19bn fine, to avoid the even greater €60bn fine that our EU partners are going to go for (now that they have been shown that Apple's IP was potentially not resident in an EU country, or any country, and discussed earlier on this thread), Apple's Dublin tax advisors may be facing a massive suit for what will be shown to be really bad tax advice (as shown by Margrethe Vestager's report).

Why Apple's EU total fines could ultimately top €60bn
http://www.thepropertypin.com/viewtopic.php?p=889587#p889587


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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Fri Sep 02, 2016 4:36 pm 
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Too Big to Fail

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Quote:
but Apple illegally re-charged its Apple Ireland IP to EU states (from a stateless residence with whom the EU has no tax treaty)


Don't follow, the absence of a tax treaty would render the invoices from the stateless entity not tax deductible in the various EU states - is that what you mean? :?


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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Fri Sep 02, 2016 5:08 pm 
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Pill wrote:
Quote:
but Apple illegally re-charged its Apple Ireland IP to EU states (from a stateless residence with whom the EU has no tax treaty)


Don't follow, the absence of a tax treaty would render the invoices from the stateless entity not tax deductible in the various EU states - is that what you mean? :?

Yes - and particularly so in the case of re-charging inter-group intangible items like IP.

i.e.

If you are a German company, and in your tax return, you have a large intangible inter-group cost item with an Isle of Man entity, that is not to work unless the German Revenue grant you a particular exemption (which can happen). That is the big flaw of Apple's Irish structure. Apple have been "implying" to the German Revenue that Apple Ireland was Irish resident (there are standard EU agreements that cover IP royalty charges within the EU). In reality, while Apple Ireland was located in Ireland (in the offices of Matheson) is was not Irish resident (according to Irish Revenue). It was not resident anywhere. That is a big (big) no no with the German Revenue (and all other EU Revenues), and there could be even greater financial consequences for Apple than the €19bn fine.

* * * * * *

This is the reason why all the US MNCs need to be "resident" in Ireland.
This is material mistake that Apple made, but it was too greedy (or its tax advisors too stupid).
Apple wanted the EU TP system (to avoid EU taxes), but also wanted to avoid all Irish taxes.
That is what Margrethe Vestager shows (and why Apple are paranoid on report confidentiality).
When this gets digested, Apple are going to have a change of heart over the €19bn fine.


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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Fri Sep 02, 2016 5:16 pm 
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observer35 wrote:
Mantissa wrote:
Apparently Tim Cook range Enda Kenny and had a "private" call with him on Sunday, so before the ruling. I expect Enda was reminded that just as Apple could inflate Ireland's GDP by 25% in one quarter, so too can they gradually deflate it over a couple of years leaving us in a long recession.

There is a rumor that Apple's Dublin tax advisors got written assurances from the State over the years (FF and FG), that it was happy with Apple's Irish resident / non Irish resident tax scam. Buried in the small print of these written assurances (again from Apple's Dublin tax advisor), were additional safeguards that make it legally impossible for the State to do anything other than support Apple's EU appeal (otherwise, Apple would have a case to sue Ireland for their EU fine). In addition, all these agreements between Apple and the State are confidential, and nobody can say they saw them. That was why the AG had to spend so long with the IAs. And why the IAs have to support Apple (but can't say why they are bound to support Apple).

Another victory for our Section 110 Vulture Fund tax avoidance schemes "organ grinders":
Seperating out the "Organ Grinders" from the "Monkey":


That's an intriguing theory. But it could well be someone running interference.
In which jurisdiction would Apple sue ? How could they enforce ?

There's a big difference between a lawyer (such as our lightweight AG) saying 'there's a risk we'll be sued' and 'we will definitely lose when we are definitely sued'


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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Fri Sep 02, 2016 6:30 pm 
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Blindjustice BATONEFFECT wrote:
BTW where was the eu when nama was distorting the property market and bulldozers were knocking down houses that had never been put up for sale


Where is the EU when a certain German carmaker was gaining an unfair competitive advantage by being allowed to ignore emission laws.

While Apple are no saints, the 13 billion euro fine is awfully similar in amount at todays exchange rate that the above carmaker has to pay in US ($15 billion dollars)


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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Fri Sep 02, 2016 7:19 pm 
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Connected Fianna Fail-ers who are on a first name basis with the experienced lads in the Dáil... how do you feel about the Dáil being recalled so everyone can bite down on this collective sh1t sandwich together?

Mmmm.... tastes like sadness.

This is a challenge for FF surely?


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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Fri Sep 02, 2016 7:41 pm 
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FTBer wrote:
Connected Fianna Fail-ers who are on a first name basis with the experienced lads in the Dáil... how do you feel about the Dáil being recalled so everyone can bite down on this collective sh1t sandwich together?

Mmmm.... tastes like sadness.

This is a challenge for FF surely?



:-D

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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Fri Sep 02, 2016 11:26 pm 
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Why I am 90% sure that Apple will drop their appeal and we will get the €19bn

Image

Unlike the Section 110 Vulture Fund scandal, we have no Margrethe Vestager to reveal what happens when you put ex. Irish school teachers in charge of multi-billion balance sheets (answer. Irish wealth destruction on an epic scale).

We will have to suck it when our "Revenue investigation" into Vulture Funds (who Revenue have been helping) find nothing inappropriate. €20bn of Irish Irish domestic taxes will just sail off to Cayman / Luxembourg. We will just have to get over it.

However, Margrethe Vestager's report on Apple in Ireland is a different story. It is going to be a masterclass of analysis (if her press releases and presentations are anything to go by), and in spite of the best efforts of our ex. school teachers to avoid getting and Irish taxes again, Margrethe is going to get us our €19bn (and much more tax into the future).

Margrethe has thrown two grenades into Apple's dodgy scheme which will kill it:

1. Her report contains evidence that Apple was violating US tax codes by illegally lending its offshore cash hoard (from its EU tax avoidance schemes) back to the US, thus avoiding formally remitting the cash to the US, and incurring 35% + c. 5% in US taxes). So bad is this violation, that Apple was forced to immediately announce that it would be paying "billions of US taxes" soon. Apple has blinked. By doing this, Apple is going to incur 35% + c 5% US tax on a portion of its "offshore" (or "stateless") cash hoard. To the extent is pays the Irish €13bn fine, it will get a tax credit for this payment, against these US taxes. As the €13bn fine is calculated on a 12.5% tax rate, it will be materially lower then the taxes if everything is sent home (over +3x €13bn = c €40bn)

IRISH TIMES: Apple to pay "billions in US" taxes, Tim Cook
http://www.irishtimes.com/business/economy/apple-to-pay-further-billions-of-tax-on-2014-european-profits-next-year-1.2775496

RICHARD MURPHY: Tim Cook isn't playing his cards very well
http://www.taxresearch.org.uk/Blog/2016/09/02/tim-cook-really-isnt-playing-his-cards-very-well/

2. However, while Margrethe's first grenade was a "small stick", to soften Apple's defense against the €19bn Irish fine, her second grenade is a "big stick" that will have Apple running to beg Ireland to accept the €19bn fine (and lock-down that Apple Ireland was always fully Irish resident). As Margrethe points out, if Apple Ireland was "stateless" (as Irish Revenue claim), then Apple Ireland could not have used EU TP rules to recharge its IP out (the EU does not have a tax treaty with a "stateless" country) to Germany, France, Italy etc. Given our EU partners have tax rates 2-3x our own, they would be sueing Apple for 2-3x the €19bn.

Why Apple's EU fine could top €60bn
http://www.thepropertypin.com/viewtopic.php?p=889587#p889587

* * * * * *

Apple has been caught doing crooked things avoiding all EU taxes (and US taxes).

This is a retail "branded" goods company with one of the highest margins we have seen in IT hardware history (a fear of markets, and why Apple's p/e multiple is 10x vs. say Google at 30x).

Given this, Apple has to put up a "cosmetic" fight against the EU ruling for a year or so (until this "political crap", as Tim C(r)ook puts it, dies down) and they can claim a confidential EU "settlement" (which will be €19bn).

However, once other EU Revenues gets Margrethe's report, and Irish Revenue's statement Apple Ireland was "stateless", their law suits will make the €19bn Irish fine seem like value for money.

Apple moved their IP into Ireland recently (to get into the 2015 final figs), boosting Irish GDP by 26% (we incur €380m in extra annual EU levies for that), so they have given up on 0% Irish tax going forward (which implies they will be paying some Irish taxes). In a way, Apple have blinked, and with the choice of:

(a) move all back to US (€40bn tax @ 35% + 5% rate).
(b) keep in Ireland and reinvest (€13bn + €6bn fine) (note, if you still have to go (a) route later, US IRS gives a credit).
(c) don't do (a) or (b) and leave yourself exposed to EU Revenues suing for illegal transgers (c €60bn).

Apple have already chosen (b) as their core (moved all IP onshore in Ireland), and will still have to do some of (a) as they can't justify that they will re-invest all the money in Ireland (hence Tim's announcement of paying US taxes).

Why Margrethe Vestager accidentally uncovered another c €7bn in Apple costs to Ireland.
http://www.thepropertypin.com/viewtopic.php?p=889565#p889565

* * * * * *

This is why the Government debate about whether to support Apple's appeal is irrelevant. Apple is not going to carry on with the EU appeal. Apple is going to pay the €19bn fine to Ireland. Only question is whether Noonan will f**k it up (again) by giving Apple a Section 110 type Vulture Fund structure, to find a new way to avoid all Irish taxes going forward.


Last edited by observer35 on Fri Sep 09, 2016 6:11 am, edited 3 times in total.

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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Fri Sep 02, 2016 11:55 pm 
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Mantissa wrote:
Blindjustice BATONEFFECT wrote:
BTW where was the eu when nama was distorting the property market and bulldozers were knocking down houses that had never been put up for sale


That's not a distortion of the internal market.

We have to be allowed to screw up our own affairs to some extent. The EU can't babysit us 24x7 sadly.


Its all against eu rules, happening in Ireland..... Ireland is in the eu.

The eu don't care they only care about getting multinationals out of Ireland


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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Sat Sep 03, 2016 2:14 am 
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FG leadership have now decided on the most useful narrative for the sheeple - the 12.5% tax rate

http://www.irishtimes.com/business/econ ... -1.2777769

Quote:
Both men also implied strongly that the commission’s ruling formed part of a larger effort to undermine Ireland’s 12.5 per cent rate of corporate tax.
Mr Noonan launched an extraordinary attack on the European Commission and some other EU member states, claiming they were trying to “establish a bridgehead” to challenge Ireland’s 12.5 per cent rate, one of the lowest in the EU.
In equally robust language, the Taoiseach portrayed the ruling as part of a wider pattern where powerful states and interests were lined up against Ireland.
“I make no apology whatsoever for the decision to appeal this,” said Mr Kenny. “This is about us as a sovereign nation. This is about the rights of a small nation. I’m not sure if the European Commission wants to ingratiate themselves with more powerful countries than ours.”
Mr Noonan, when asked if this was an attack on Ireland’s tax policies, replied: “I think they are establishing a bridgehead. There is a lot of envy across Europe about how successful we are in putting the HQ of so many companies into Ireland and especially into Dublin.


Jealousy and envy



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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Sat Sep 03, 2016 7:41 am 
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observer35 wrote:
There is a rumor that Apple's Dublin tax advisors got written assurances from the State over the years (FF and FG), that it was happy with Apple's Irish resident / non Irish resident tax scam.


Buried in the TCA somewhere is a section which sets out that if something the revenue write to you is incorrect, the letter has no standing.

Revenue providing assurances to a specific company would be fairly unique in of itself.

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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Sat Sep 03, 2016 9:29 am 
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Interesting...
http://m.rte.ie/news/2016/0902/813591-santander-apple/

More detailed than many an RTE article.


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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Sat Sep 03, 2016 9:51 am 
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So what is to stop our politicians bringing corporate tax down to 6% (after all they are claiming corporate tax take doubled in last few years) and give all sorts of discounts that drop the rate to almost zero for "research and development" or "hiring unemployed" as they do in likes of France?

I think after this any goodwill between our gombeen and EU has been demolited


Last edited by satechi on Sat Sep 03, 2016 9:53 am, edited 2 times in total.

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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Sat Sep 03, 2016 9:52 am 
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grumpy wrote:
observer35 wrote:
There is a rumor that Apple's Dublin tax advisors got written assurances from the State over the years (FF and FG), that it was happy with Apple's Irish resident / non Irish resident tax scam.


Buried in the TCA somewhere is a section which sets out that if something the revenue write to you is incorrect, the letter has no standing.

Revenue providing assurances to a specific company would be fairly unique in of itself.

As I understand it, the assurances are not from the Revenue, they are from the State.

I believe some other major MNCs have equivalent assurances. There are at least two other very large "stateless" IPs floating out there (who are probably bunking in one of the few Dublin EU tax avoidance IP "youth hostels" like 70 Sir John Rogersons Quay). As per my post above, the "stateless" IP tax structure is going to be attacked by various EU Revenues (who now realise it violates the EU TP rules). I think the "stateless" IP tax structure is going to turn out to be very bad tax advice indeed (certainly not worthy of Best Irish Tax Advisor award).

On reflection, it is understandable that Apple would have asked for such written State assurances. If a major MNC is going to use Ireland to "wash" it's EU profits of all tax liabilities, which will require big investment in Ireland (small vs. scale of EU taxes being washed), then a big risk is that a future Irish Government (i.e. SF type) would dis-own this structure and all hell breaks loose. Once you commit, moving €50bn of IP around is not easy. However, if Apple had used a senior non-Irish EU competition lawyer, they would have advised them to burn it.

I believe that this is yet another reason why Apple will drop its appeal (per above), as such written assurances from the State are really helpful proof that Apple got a "sweetheart deal". It is possible that the EU Commission knows about these assurances from their audit 18 months ago. Such letters are often used to nail EU anti-competition cases. Again, better advised, Apple should not have asked for them. However, this could all be rumour.

I would expect that there is a lot of "shredding" going on in Dublin over the weekend.

Margrethe Vestager's 130 page report is going to be a bombshell. If Hillary Clinton does not win the US election, you could see substantive prosecution by the US IRS (and US FBI) on MNCs in Ireland (US executives have been criminally presumed for lessor US tax violations). Regardless, I suspect that we are going to see the various offices of Apple (and some other Irish MNCs) raided across the EU by local revenue commissioners building their cases against IP fraud.


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 Post subject: Re: Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, C
PostPosted: Sat Sep 03, 2016 10:05 am 
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grumpy wrote:
observer35 wrote:
There is a rumor that Apple's Dublin tax advisors got written assurances from the State over the years (FF and FG), that it was happy with Apple's Irish resident / non Irish resident tax scam.


Buried in the TCA somewhere is a section which sets out that if something the revenue write to you is incorrect, the letter has no standing.

Revenue providing assurances to a specific company would be fairly unique in of itself.



Buried or whatever, it's self assessment, so Revenue comfort letters/assurances/opinions are always pretty worthless? :?


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