Topic: Tax

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    EU Takes Action Against Amazon and Ireland Over Taxes (Oct 4, 2017)

    It was reported earlier in the week that the EU would soon take action against both Amazon and Ireland (with regard to Apple) over the underpayment of taxes in the trading block, and both actions are now official. In the Amazon case, the company is being asked to pay 250 million euros to get the company up to the level of taxes the EU says it should have paid in Luxembourg over the last few years, while in the case of Ireland, the country is being taken to EU court by the European Commission over the fact that it has not yet collected and placed in escrow the 13 billion euros Apple owes it. I’ve covered both cases in the past, so I won’t add much here, but of course this is all part of the ongoing tension between the EU and the US tech industry on a variety of fronts, something that prompted me to create the first new narrative here on the site in a while and retroactively tag a number of past posts against it – you can see it here.

    via Recode

    EU Likely to Ask Amazon to Pay Hundreds of Millions in Back Taxes to Luxembourg (Oct 3, 2017)

    In a case with significant parallels to the European Commission’s tax case against Apple, it appears that it’s preparing to take similar action against Amazon over its past payment of taxes in Luxembourg, where its European operations are headquartered. As with the Apple case and Ireland, the country had offered Amazon reassurances that it was in compliance with local tax laws and the company has therefore been paying taxes in good faith, but the Commission feels that the deal involved special considerations which go against the normal tax rules for businesses in the country and therefore violate EU rules. The decision might be announced on Wednesday, and is likely to leave Amazon with a tax bill to Luxembourg for several hundred million euros, much smaller than Apple’s tax bill of 13 billion euros, but still significant given the level of Amazon’s overall profits in Europe, which have always been fairly low.

    via Financial Times

    EU Considering Shift to Tax Companies Based on Revenue Rather Than Profits (Sep 11, 2017)

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    Google Settles With Italy for $320m Over Unpaid Taxes (May 4, 2017)

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    Apple files 14-point appeal against European Commission’s $14 billion tax edict – AppleInsider (Feb 21, 2017)

    Long story short: Apple has filed its formal appeal of the EU’s action against Ireland regarding Apple’s tax treatment in the country, and it argues for the dismissal of all charges on the basis of a number of different points. That’s not surprising – Apple immediately after the ruling said it would appeal, so this is just that process rolling along. I’ve never been a huge fan of the ruling – it felt like judicial overreach and part of the ongoing spat between the EU and US on taxes and on competition between US and European tech companies rather than something based on actual legal merit. Nevertheless, as I admitted at the time, neither I nor the vast majority of other tech industry commentators are actually experts in EU tax law, and even admitted experts like the Irish authorities, Apple’s accountants and lawyers, and the European Commission’s investigators can actually agree on what the right answer is. We can state opinions all we want, but they don’t actually matter – this case will go to court and at some point a conclusion will be reached which all the parties will have to live with. A move to enable lower-tax repatriation in the US would certainly go some way to bolstering Apple’s case that it already pays adequate taxes in its home market on what it earns in Europe, but Apple has no direct control over that outcome either.

    via AppleInsider (Apple’s filing here and some fairly Euro-skeptic analysis by Florian Mueller here)

    Apple CFO says capital returns will rise if cash repatriation rate is lowered – Financial Times (Feb 14, 2017)

    Apple CFO Luca Maestri spoke at the Goldman Sachs conference today, and although the audio quality of the broadcast was miserable, the FT seems to have been able to pick out the best bits. Two specific ones are detailed here – firstly, Apple still hopes to be able to repatriate more cash soon following a change in US tax policy, and secondly, it remains skeptical about more manufacturing in the US. On the former point, it sounds like Apple’s main focus for the repatriated cash would be increasing returns to shareholders and not big acquisitions – that’s not altogether surprising because it’s in keeping with past strategy, but there has been a rising chorus of voices saying that the returns to shareholders don’t seem to be having the desired effect on the share price. The US manufacturing comments also aren’t surprising – everything we’ve heard on this point as it regards Apple specifically has come from others – Donald Trump, Foxconn, and so on – not Apple itself. And certainly manufacturing any kind of high scale product like iPhones in the US would be almost impossible given the lack of appropriate infrastructure here.

    via Financial Times

    Apple’s international iTunes business moves to Ireland on Feb. 5 – Apple Insider (Jan 27, 2017)

    Interesting to see this move go ahead in the wake of the recent EU Ireland tax action. Ireland is obviously a big base for Apple in Europe, and this is mostly about moving the legal home of the iTunes business in Europe, rather than a big physical move. But it’s intriguing to see Apple double down on its presence – legal and physical – in Ireland with all the uncertainty over its tax status there. Apple is, of course, fighting the EU’s ruling with the help of the Irish government, but there’s obviously still a decent chance that things don’t go Apple’s way here.

    via Apple’s international iTunes business moves to Ireland on Feb. 5

    Google Lowered 2015 Taxes by $3.6 Billion Using ‘Dutch Sandwich’ – Bloomberg (Dec 21, 2016)

    Alphabet and Amazon continue to be the highest-profile examples of US companies seeking to minimize their overseas tax burdens, and of course the EU has already taken action against Apple in this regard. A US tax holiday in 2017 could start to change this narrative, but until then it’s likely to continue to draw unwanted attention.

    via Google Lowered 2015 Taxes by $3.6 Billion Using ‘Dutch Sandwich’ – Bloomberg

    Apple Owes $14.5 Billion in Back Taxes to Ireland, E.U. Says – The New York Times (Aug 30, 2016)

    An investigation which began in 2014 concluded in August 2016 with the EU finding that Apple’s tax arrangement with the Irish government contravened EU tax policy, and requiring that Ireland recoup $14.5 billion in back taxes. The EU had also made similar moves with regard to Starbucks and Fiat as a result of similar investigations, but the numbers involved in the Apple case are far larger. Apple argues that it creates essentially all the value in its products in the US – iPhones and other products are famously “Designed by Apple in California” – and that therefore it repatriates all its profits to the US to be taxed there. The Irish arrangement recognized this argument and the Irish government has been happy to have Apple build a big base in Ireland on this basis, but the EU feels that Ireland’s treatment of Apple is an example of unequal treatment. Part of the reason for all this is that Apple has been keeping huge amounts of cash overseas for years in anticipation of an eventual tax holiday in the US, and so this isn’t just about Apple and the EU but also about a larger battle between US and European tax authorities.

    via New York Times