nav search
Data Centre Software Security DevOps Business Personal Tech Science Emergent Tech Bootnotes
BOFH
Lectures

back to article
Apple hands €14.3bn in back taxes to reluctant Ireland

onefang

If Ireland doesn't want this €14.3bn, I'll be happy to take it off their hands. For a small fee.

SkippyBing Silver badge

It could just rest in my account.

sorry, what?
Coat

Taxing

About to do my tax return. Hope I don't owe HMRC that much.

MiguelC Silver badge

Let it rest in your account

With the current state of interest rates it could prove to be a costly decision.

States have been paying - for some time now - to park their cash in "secure" destinations (like German bonds or event short term Portuguese, Italian and Spanish ones)

cray74 Silver badge

Dear Sir,

I have been requested by the Irish Corporate Tax Escrow Fund to contact you for assistance in resolving a matter. The Irish Corporate Tax Escrow Fund has recently collected a large sum of taxes from the Apple Corporation. The taxes have immediately produced moneys equaling € 14,300,000,000. The Irish Corporate Tax Escrow Fund is desirous of releasing this money to taxpayers, however, because of certain regulations of the Irish Government, it is unable to move these funds.

You assistance is requested as a non-Irish citizen to assist the Irish Corporate Tax Escrow Fund, and also the Central Bank of Ireland, in releasing these funds to taxpayers. If the funds can be transferred to your name, in your United Kingdom account, then you can forward the funds as directed by the Irish Corporate Tax Escrow Fund. In exchange for your accommodating services, the Irish Corporate Tax Escrow Fund would agree to allow you to retain 1%, or € 143,000,000 of this amount.

However, to be a legitimate transferee of these moneys according to Irish law, you must presently be a depositor of at least €143 in a Irish bank which is regulated by the Central Bank of Ireland.

If it will be possible for you to assist us, we would be most grateful. We suggest that you meet with us in person in Dublin, and that during your visit I introduce you to the representatives of the Irish Corporate Tax Escrow Fund, as well as with certain officials of the Central Bank of Ireland.

Please call me at your earliest convenience at 1890 201 1060. Time is of the essence in this matter; very quickly the Irish Government will realize that the Central Bank is maintaining this amount on deposit, and attempt to levy certain depository taxes on it.

Yours truly,

Prince Garret FitzGerald

Anonymous Coward
Anonymous Coward

Re: Dear Sir,

What a coincidence! I received a similar email earlier and paid the deposit almost immediately! I'm so excited!

redroof

Re: Dear Sir,

"Dear Sir,

I have been requested by the Irish Corporate Tax Escrow Fund to contact you for assistance in resolving a matter...."

- ^ this ^ really made my morning, nothing better than a cup of black coffee and a good laugh! Thank you

Come to the Dark Side

Arrh, the scurvy dogs have parted ways with their booty after all. It be a fine haul but as nothing compared to the riches lining the coffers of their lair. Arrh

LDS Silver badge
Devil

This explain the iPhone prices increase....

RyokuMas Silver badge
Pint

@COme to the Dark Side - respect for the Pirate Day post!

hplasm Silver badge
Pirate

Aye!

Yarr!

I ain't Spartacus Gold badge
Pirate

Shiver me timbers! I'd clean forgot it be the 19th! And here's me without me hat.

Anonymous Coward
Anonymous Coward

This:

"The alleged state aid cash will be held in an escrow fund until the appeal process has been completed, which could take years".

Bagsy the interest.

The Specialist

Re: This:

Good thinking but wrong. The interest accrued will also be paid to the escrow account.

If the funds eventually transfer to Irish Govm't does that mean EU will get some of the money back as the GDP for Ireland will have been different? Also, will that reduce the burdens on the other states contributing to EU coffers and if so, will they take that into account should UK finally severs the ties with them?

Yay! Gonna be difficult to unravel that clusterf**k.

anothercynic Silver badge

Re: This:

Yes. That is one reason why Ireland doesn't want the extra dosh. It will skew the GDP data for the next assessment period for EU membership fees, and Ireland would prefer to continue to pay a lower fee commensurate with their *real* GDP, not these once-off blips.

I ain't Spartacus Gold badge

Re: This:

It might impact Ireland's GDP, and therefore contribution. Remember when we retrospectively added some drug dealing and prostitution to our GDP and then had to pay a chunk extra over the Commission for the past revisions.

But the EU budget isn't that granular. Nobody gets any money back, because Ireland have handed over more - as the EU budget is set at about 1% of GDP. I think it might be something like 1.03% or something, but can't remember or be bothered to check.

A bit like that episode of Yes Prime Minister where Sir Humphrey says that the Treasury doesn't like handing back money, just because they haven't got anything to spend it on. They tend to ask for as much as they think they can get away with, and work out what to do with it later.

katrinab Silver badge

Re: This:

You are welcome to it. At the current rate of -0.46% (https://markets.ft.com/data/bonds , select "Market rates")It will *cost* you €65,780,000 per year.

DougS Silver badge

Why would you pay that much negative interest?

They might want to consider converting it into cash and putting it in a vault then. Sure you can rent a suitable vault including round the clock security and insurance against theft (in case Oceans 14 comes calling) for a lot less than 65 million euro a year!

I ain't Spartacus Gold badge
Happy

Re: Why would you pay that much negative interest?

DougS,

I bet you can't. How many lorries to transport €14.3 billion of cash? That's 28.6 million €500 notes - and lets say a bundle of 100 of those is 1 inch thick - that's a stack 24 thousand feet tall!

Also there probably aren't enough €500 notes in circulation. So you'd have to print them, even at €0.50 per note that's €15m just on printing. Then you've got security guards, van drivers, fuel, wear and tear on vault doors, swamp insurance...

DougS Silver badge
Pint

Re: Why would you pay that much negative interest?

Eh, just print one €14.3 billion note and call it a day and enjoy a well deserved beer! :)

The US used to print bills up to $100,000, which weren't circulated but used for transfers between federal reverse branches. So there is some precedent for printing larger notes. Maybe not €14.3 billion large, but I could see an argument for printing €1 million notes for stuff like this. Those would actually be worth less than the $100,000 bills were back when they were used.

Also makes them less likely to be stolen, since they'd be nearly valueless to a thief because who is going to launder those for him?

Dan 55 Silver badge

Brexit crowbar

They may say they don't want to use the money now, but I wonder if they'll be tempted to use it to mitigate the effects of their neighbours setting their own house on fire in some drunken fit...

TVU Silver badge

Re: Brexit crowbar

"They may say they don't want to use the money now, but I wonder if they'll be tempted to use it to mitigate the effects of their neighbours setting their own house on fire in some drunken fit..."

I see your post got quite a few downvotes presumably from snowflake Brexit supporters who still refuse to accept the reality that Brexit has the potential to do immense, long term damage to the British economy.

Ireland stands to gain from the UK's descent into crude, nationalist Europhobia not least because of the relocation of many financial services, IT and hi-tech manufacturing companies to what will become the EU's only native English-speaking country after Brexit.

I also hear that arch Brexit millionaire hypocrite Jacob Rees-Mogg has opened a new Somerset Capital office in Dublin precisely to protect his multi-million investments from the negative effects of Brexit.

Anonymous Coward
Anonymous Coward

Re: Brexit crowbar

> They may say they don't want to use the money now, but I wonder if they'll be tempted to use it to mitigate the effects of their neighbours setting their own house on fire in some drunken fit...

They could use it to build a tunnel under the Irish Sea. Would do wonders for speeding their exports to/from the rest of Europe (regardless of the UK's Brexit terms).

The only downside is that the tunnel would pop up in Wales somewhere and then they'd have to use the M4 for the rest of the journey. Improving that would need the whole €15bn per mile!

Faster Better Greener

Re: Tunnel under the Irish Sea

Why not go the whole hog and tunnel direct to France? A direct Republic – EU mainland link would further marginalise the importance/influence of post-Brexit UK. Literally a bypass.

Downside: at current tunnelling cost rates they'd need about 3x-ish €14.3bn. No wait: those are HS2 cost estimates. Panic over, slice two thirds off the capex estimate and you'll be OK.

Reserve me a seat on the first TGV from Gare du Nord to Heuston. The clue's in the TGV bit: if you do come up a bit short with only €14.3bn to, the French will (as usual) bend EU procurement rules to subsidise the whole scheme to ensure a market for their kit. Best of all possible worlds from a Dublin perspective: bypass the UK and chummy up to the 'flexeurs des reglements' who make EU Grands Projets such great value for money.

Peter Galbavy

How deep in Apple's pockets must these politicians be to be refusing this tax being forced onto their country and the benefits it could have for their constituents?

Lars Silver badge
Coat

As the Irish government denied any wrongdoing from the very start I assume they will stick to it and let the case proceed, reluctant or not. Some smiling in the corridors, who knows.

And they like Apple to stay, no doubt.

A nice sum of money but one has to compare it to something to understand it, say to the Budget:

revenues: $85.41 billion (2017).

I ain't Spartacus Gold badge

Peter Galbavy,

Well the Irish government decided on a policy of a friendly business environment and low corporation tax rate in order to attract multi-national HQs to boost their economy. And it's broadly done well for their economy. So of course they're going to object to having this affected by the European Commission. They've got to keep looking like a friendly place to base your HQ - otherwise there's always Luxembourg, the Netherlands, Malta etc.

On the other hand, it looks like they did give Apple a special deal, that other multi-nationals didn't get - so you could argue there's no threat to that economic model from this. But I think they've decided it pays to make sure companies know they're maintaining that policy.

I'm sure they can think of lots of nice things to do with €14bn.

Loyal Commenter Silver badge

How deep in Apple's pockets must these politicians be to be refusing this tax being forced onto their country and the benefits it could have for their constituents?

You have to balance the effects of the immediate cash injection to the coffers of the Republic, with the "attractive to tech companies" image the country has, and its potential negative impact on inward investment if other large companies decide to relocate their European operations to, for example, Luxembourg, instead. If I remember rightly (correct me if I'm wrong), Dublin is also host to the European headquarters of HP, Microsoft and Dell, amongst others.

Doctor Syntax Silver badge

"How deep in Apple's pockets must these politicians be to be refusing this tax being forced onto their country and the benefits it could have for their constituents?"

Yet again we have to explain.

Apple locates in one country.

The country that they land in gets corporation tax of x% of How Much!!!.

x% of How Much!!! is a tidy sum.

What's more it's a tidy sum more than zilch which is what all the other countries get.

It's a competitive bidding situation. Ireland put in the lowest bid and got the gig. That benefits their constituents because it brings that tidy sum into the nation's coffers. It also brings some employment although not in proportion to the amount of money that's flowing through the company. For extras it also means that the corporation tax for all other Irish companies is lower as well and that puts those companies, including those that employ proportionate numbers of people, at a competitive advantage.

In short it's a big win for the constituents, so much so that ever since Ireland won the rest of the EU governments who missed out have hated Ireland for it. That's why things have ended up this way.

Potemkine! Silver badge

" the Irish government decided on a policy of a friendly business environment and low corporation tax rate in order to attract multi-national HQs to boost their economy".

It's called 'fiscal dumping'.

adam payne Silver badge

"While the government fundamentally disagrees with the Commission's analysis in the Apple State Aid decision and is seeking an annulment of that decision in the European Courts

Apple are giving you 14.3bn and you don't want it. There's got to be an angle here surely.

TheSirFin

I Presume that it is the fact that Ireland is playing he long game, and knows that keeping Apple happy and in Ireland long term, is more beneficial than a one off windfall and risk them pulling out ??

Robert Forsyth

(I was under the impression) Ireland wants hi-tech jobs in Ireland, by attracting hi-tech companies with low taxes. I'm not sure the strategy works, I guess it works for Ireland as they seem to be trying not the frighten other 'hi-tech' companies.

Having rich companies (and poor ones) stifle technology diversity and innovation.

Ledswinger Silver badge

Ireland wants hi-tech jobs in Ireland,

Since a well run DC doesn't actually have a large headcount of skilled and highly paid labour I'm not sure the Irish government were thinking like that. I suspect that they were thinking that low taxes were their only tool to attract investment that they otherwise wouldn't see at all, it creates a few short term construction jobs, and after that it is just a tax resident business. As there's few reasons to choose Ireland other than the tax rates, offering tech companies low taxes didn't have any downside for the Irish finance ministry.

Obviously the larger European countries don't see it like that, and whilst they claim to want borderless trade and internal competition, that's only when they benefit. So Germany doing very well selling cars to other EU nations on the back of a significantly under-valued DM/Euro transition rate is fine. Ireland being creative to actually inject some competition and variation into tax rates and the data centre market, that's not fine. It'll be interesting to see how this pans out, and whether the GCEU will punish Ireland, or leave the EC with egg on their face.

Anonymous Coward
Anonymous Coward

"Obviously the larger European countries don't see it like that, and whilst they claim to want borderless trade and internal competition, that's only when they benefit. "

The EU was pissed not because of the low tax, but because of the low tax *only for a select few*. Irish businesses paid a significantly higher percentage than Apple. They were in effect giving a huge amount of state aid to an already incredibly rich company.

So, the Irish border was very much effective: those fully inside it had one order of magnitude more fiscal pressure than those who only put one foot in.

I believe that the role of the EU is not to define competition as "giving bigger advantages to richer companies".

Aqua Marina Silver badge

“I Presume that it is the fact that Ireland is playing he long game”

I presume it’s more likely that Ireland was participating in a long con!

Given the effective rate of tax for Apple prior to the investigation was 0.005%, I think that for Ireland to receive an equivalent 14 billion euros in tax revenue, they would have had to wait decades if not never.

Has any official source compared the current windfall to projected income had the state of affairs not changed. Including the cost of brown envelopes of course!

LDS Silver badge

Frankly, it's not clear what benefits Ireland as a country could have from basically not asking any tax from a few very big companies that have no other places to go within EU, and close to business centers like London or Paris.

The corporate rate is already very low, and you can find comparable or better rates only in Bulgaria or some Mediterranean island, and I can't really see Apple moving there. Luxembourg is also involved in dodgy deals, but its corporate rate is more than twice the Irish one.

Meanwhile Ireland has an income tax at 40% over 34-43K euro - depending if you are married, with children or not-, which is not low at all. Meanwhile Irish debt greatly increased in the past years. Still withing reasonable limits, but higher.

So you wonder who really reaps the benefit of such system, beyond Apple...

LDS Silver badge

"So Germany doing very well selling cars"

Should Germany set BMW, Mercedes and Volkswagen Group tax rate at 0.005% as well? Would PSA, FCA (which anyway moved to London and Amsterdam to pay less taxes) & C. love that?

Frankly, German cars are not cheap at all - they sell well not for the price, often despite the price (more or less like the iPhone...)

The exchanges rates were fixed well before the Euro. Germany could not undervalue its one much, because Germany still relies on a lot of import of raw materials for its industries. And it would have crippled citizens purchasing power. It's not China.

It's only competing countries that would have liked to see Germany industries put at a disadvantage with lower exchange rates for the Mark and higher for their own currencies - the good, old practice of devaluation to sustain bad companies unable to compete but paying their workers less, while stashing precious currency abroad.

EU rules forbid state aids but in exceptional circumstances, and Ireland violated that.

Anonymous Coward
Anonymous Coward

>Apple are giving you 14.3bn and you don't want it. There's got to be an angle here surely.

It's a different issue which will wait for the appeal, but Vestager (competition commissioner) made the point at the time that since EU wide revenue was incorrectly reported via Eire, other countries will be able to claim their lost taxation, most of it in fact.

Peter Gathercole Silver badge
Joke

What I want to know

is what the Irish Government intends to do with the ~3000 Euros per head of their population (there's approximately 4.77 million Irish residents).

I'm sure that Irish tax payers would love a tax rebate, or even money put into the country's infrastructure.

I know, they could use it to build the border with NI, when we hit the WTO rules next year.

Anonymous Coward
Anonymous Coward

@LDS and "So you wonder who really reaps the benefit of such system, beyond Apple..."

I would say the same bankers who got 99% of the UK living on tick and are now jumping ship to IE where they can still have have access to Europe after Brexit.

I find it ironic that the UK banking vultures chose the only EU country that didn't require them to speak a new language after all the years of BS in the UK of how they were the best thinkers, rather than fools who gambled with other people's money.

Ledswinger Silver badge

So you wonder who really reaps the benefit of such system, beyond Apple...

The Irish government received taxes of €1.5bn from Apple in the three years prior to 2017, which was 7% of Ireland's total corporation taxes. Add in 6,000 Irish employees and I presume that'll be a whole pile of payroll taxes on top, plus the property or land tax on their facilities. So I'd say Ireland has benefited quite nicely.

The fact that Apple may have done much better is immaterial - Ireland got significant benefits by their strategy, when absent that strategy Ireland would have got nothing. Various comments in this thread are along the lines of "its not fair to other businesses" but SO FUCKING WHAT? Every government does it. The UK tax authorities cut sweetheart deals with Google and others, the Germans molly coddle their car industry, the French still cling to favouring their "national champions", the Dutch have allowed all manner of dodgy tax dealings with anybody who's willing (eg Ikea), Luxembourg allowed McDonalds to run its franchising operation through Luxembourg and pay no corporation tax. They're all at it.

Although that last one is of special interest. The EU Commission have recently concluded that charging McDonalds no tax at all was absolutely fine and dandy. I'm sure its got NOTHING to do with that greaseball EU Commission president being a Luxembogey himself.

So again, why are the EU picking on Ireland? From the examples I've quoted (and there's many more) it clearly isn't about having one set of transparent and universal rules. If Apple announced they were leaving Ireland, every other EU country would be sizing up both legal and illegal schemes to try and make themselves the new base.

Anonymous Coward
Anonymous Coward

This was one of the strangest parts of Vestager's ruling. Firstly, her ruling was not about the fact that Apple paid very little tax in Ireland (though she made a big play about that in the press conference to make sure the "proper" spin was put on the story) but that Apple got a special deal which was not available to other companies in Ireland. The key point was the phrase that it was not available to other companies in Ireland as Ireland has every right to charge whatever rate of tax it wants as long as it is consistent. Ireland's case is that Apple availed of tax structures which were available to any company in Ireland and the fact that some companies did not have the scale of operation to be able to benefit from them did not mean they were not available to them. This, in the Irish government's opinion, meant that the structures did not amount to illegal state aid.

Vestager's statement that Apple should have paid some of the €13.1 in other countries would mean that, by her own argument against Ireland, she was accusing these other companies of providing illegal state aid to Apple but she never framed it in that fashion. If she was being consistent, she would have made a big song and dance that all the European countries had colluded to provide state aid to Apple on a European wide basis as they all failed to recover the tax which she deemed was owed

LDS Silver badge

"So I'd say Ireland has benefited quite nicely."

Sure. But still, applying the standard tax rate would have bring the same benefits and much more - maybe lowering the income tax for people far less rich than Tim Cook? Create a school system not dominated by the Catholic Church? And why a very, very low 0.005%?? Maybe something a little less than 12.5%, but basically no tax at all?

They could ignore EU, but their own people?

Again, Apple has no other place to go in EU with better options - so there's no risk it could move away.

Sure, there are other distortions in EU, but no one so blatant and huge. Which makes people believe the benefit for "the country" could be instead for a few Irishmen and Irishwomen...

MonkeyCee Silver badge

Apple HQ

" you can find comparable or better rates only in Bulgaria or some Mediterranean island, and I can't really see Apple moving there. "

As I understand it, after the initial ruling Apple worldwide shifted to either Jersey or Guernsey, intending to do the same deal as in Ireland. So they pay their full tax on profits earned in Jersey, but not on stuff transferred from other parts of the world.

No reforming UK controlled tax havens now, we need all the allies in dodgy countries that we can get.

LDS Silver badge

"either Jersey or Guernsey"

Both are not EU members - I don't know what will happen to their treaties with EU when UK exits. Because they are usually regarded has "tax havens", there's some risks involved in stashing money there, as some loopholes could be closed.

I really hope once UK is out, Channels Islands are also kicked out fully - although all we know politicians and their friends like a tax haven at hand.

Anyway, while they could be good as a "fiscal residence", they are not exactly the best place for an European HQ and the people working in it, I don't think Apple has any incentive to move it.

Apple started to move to Jersey well before the Vestager investigation. It started when EU began to close loopholes like the "Double Irish".

Doctor Syntax Silver badge

"There's got to be an angle here surely."

Yes. It's been explained above. Several times. It's also been explained after previous articles. Several times.

Doctor Syntax Silver badge

"I suspect that they were thinking that low taxes were their only tool to attract investment that they otherwise wouldn't see at all, it creates a few short term construction jobs, and after that it is just a tax resident business."

There's more to it than that. It lowers corporation tax across the board which makes all the other companies, including those with a higher proportion of employees to revenue, more competitive internationally. Essentially the multinationals are subsidising the national companies. You can only do this if your real economy is relatively small so only a few countries can play in the multinational taxation market which pisses off those who can't.

Arthur the cat Silver badge

Vestager said […] with the firm paying "an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014".

Except that post-Trump, with the new US corporate tax legislation, Apple have repatriated their profits and paid significant US tax on them, which rather shoots Vestager's original argument out of the water. Continuing to insist Apple pays tax to Ireland would let Trump demand more taxes from all EU companies trading in the US.

Santa from Exeter

Rules are not equal

Please don't conflate the rules of civilised tax nations to those of the US who demand US taxes on money earned by Americans working and living outside the US in addition to the local Income Tax already paid: likewise the stupid tax on 'repatriation' of profits. The stupidity of double-dipping in this way is purely an American thing and actually harms the Us by keeping money outside their economy. I would not, however, be in the least bit suprised to fiind the Orange One demanding more money from EU companies, that fits perfectly with all his other policies on Nationalistic Protectionism.

Page:

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

The Register - Independent news and views for the tech community. Part of Situation Publishing