[todd-davies]

What's the cause of all the flip flopping between Apple having to pay the bill or not? I think the main problem that this area of law is fundamentally uncertain and hard to apply. Legal mistakes get made, and judgements get appealed until people figure out what the law actually says.

A secondary issue is that judges in appeals courts are generalists, not tax or state aid experts. Despite this, they get landed with the hardest cases - situations that haven't been seen before which throw up new legal issues - and need to figure out what to do. Most of the time they get it right. Some of the time, they mis-interpret the law and get it wrong. That's why we have the appeals process.

So where are we up to in terms of this case, and how many more flip-flops we can expect? This article is citing an advisory opinion of one of the EU's Advocate Generals (themselves, very senior judges). These advisory opinions are issued prior to the CJEU (the highest court) making a final ruling. They are there to guide the CJEU so that the final ruling is as good as possible. Although this specific case should be finalised after the CJEU makes its ruling, I'm sure the case law will continue to evolve in the future as multinational companies push the boundaries of the EU's tax and state aid regimes.

[izacus]

> What's the cause of all the flip flopping between Apple having to pay the bill or not? I think the main problem that this area of law is fundamentally uncertain and hard to apply. Legal mistakes get made, and judgements get appealed until people figure out what the law actually says.

Or you know, Apple is trying really hard to not pay the tax they should and are stalling the process by throwing lawyers at it, because they want to continue their shell company scheme of reselling IP rights to avoid taxes in locales where they sell their hardware and make profit.

Is this the first time you're seeing a megacorp try their hardest not to pay their due?

[justincormack]

Ireland didn't want Apple to pay either, as they wanted to be able to keep doing this sort of deal.

[nannal]

It's in Ireland's best interest: https://en.wikipedia.org/wiki/Put_on_the_green_jersey

[MuffinFlavored]

> https://www.freshbooks.com/glossary/tax/double-irish-dutch-s...

> https://en.wikipedia.org/wiki/Double_Irish_arrangement

> https://en.wikipedia.org/wiki/Ireland_as_a_tax_haven

What portion of Ireland's GDP is "American multinational companies" using them for tax avoidance?

As long as it is legal for Apple to route the money it makes in America back to shell companies in Ireland and pay 12.5% corporate tax instead of something higher elsewhere, why would it ever stop?

[extraduder_ire]

Around 23% in 2020, based on the difference between GNI* and GDP. It has been higher than that in the past, but increased medical manufacturing pushed it back. It's not just American companies, but they're certainly the largest. The most notable effect here is that you learn to be wary of any stat mentioning "GDP" or "GDP per capita".

In 2015, when the US cut-off date for many of these transfers hit, the CSO refused to release accurate corporate tax numbers because it would have identified the companies involved.

[vasdae]

That's the way countries should behave generally.

[nicce]

Countries set the bar for human rights, morale and ethics. What if they don’t matter if some provides the money?

[todd-davies]

For sure they are throwing lawyers at it. It's 13bn after all. But the underlying reason for the appeal is the same; the law is not yet clear as to what should happen.

[hef19898]

Let's assume the law isn't clear, ans since I am no tax lawyer I actually cannot tell either way, pursueing that clarity at court is exactly what I would expect from Apple and the EU to do. So, the system is working as expected here.

[AnthonyMouse]

If the system was well-functioning the tax law would be clear enough that it doesn't take a team of lawyers and courts to know what's permitted.

How is anyone supposed to arrange their affairs if the law they're going to be subjected to isn't established until after the fact?

[hef19898]

Laws are never are clear enough, there is always room for interpretation. Laws are not some piece of software that give predctable answers, hence courts and the whole legal system. And it is the latter one atvwork here, as intended.

[AnthonyMouse]

This is a rationalization for convoluted legislation. The impossibility of perfection is a poor excuse for mediocrity.

Notice that we almost never hear about corporations avoiding payroll taxes or VAT. They avoid this kind of tax in particular because the rules are unusually squishy and incoherent, and every time they find another way to do it, governments respond by making it more complicated or even less coherent instead of addressing the root cause and replacing it with something clearer and simpler.

[izacus]

Where do you see the lack of clarity? A wish to avoid paying is not lack of clarity.

[NoboruWataya]

Without getting into the nitty gritty of it, it seems pretty obvious that there is a lack of clarity given that the European Commission came to one conclusion, the General Court concluded that the European Commission was incorrect and now an advocate general for the European Court of Justice has concluded that the General Court was incorrect. These are all smart people who have spent a lot of time and effort studying the law in this area. There are a lot of extremely reductionist takes on the case in the media but the actual legal principles in dispute, and their application to the facts, are quite complex.

[izacus]

You keep mixing up "muddying the waters to avoid paying tax" and "lack of clarity" The "lack" you speak of is generated by a megacorporation to avoid paying their part - and you keep attributing it to the wrong party.

[TrapLord_Rhodo]

It's not apple V. EU. It's Ireland Vs. EU. The real crux of the argument is; Does Ireland have the authority to grant Apple it's deal.

[AnthonyMouse]

Corporations will always attempt to lower their costs. It's like blaming the rain for being wet.

It isn't inherently necessary to have a tax system so convoluted that these games are even possible. If you tax wages and companies employ people in your jurisdiction then they have to remit the tax. If you tax sales and people buy things in your jurisdiction then companies have to remit the tax. If you tax property and companies own property in your jurisdiction etc. etc.

The problem is governments keep trying to tax companies not based on what happens in their jurisdiction but what happens outside of it, which they can only do sometimes, and that gives the companies an opportunity to find ways to make it one of the times they can't. Just stop doing that and tax the things that actually happen in your jurisdiction.

[NoboruWataya]

It is the EU institutions who are disagreeing with each other, Apple have nothing to do with it. The General Court of the EU isn't muddying the waters to help Apple avoid paying tax.

This is the General Court's judgment by the way: https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:62...

[s1artibartfast]

The case is between the Irish government and the EU. Ireland made a a tax deal with Apple. Ireland also made a no corporate subsidy deal with the EU.

EU wants apple taxed. Ireland says a tax break is not a subsidy, and a subsidy would be if they gave Apple grants, funds, or special loans

[AnthonyMouse]

> Ireland also made a no corporate subsidy deal with the EU.

That seems odd. For example, if the government provides a national healthcare system, this is effectively a subsidy to employers who can then avoid providing a health plan their employees might otherwise demand or otherwise have to pay them more to compensate for their need to pay for their own healthcare. How is this being distinguished from any other form of subsidy? Isn't subsidizing things what governments do with tax money?

[padjo]

Bans on state subsidies are a core principle that enables the EU single market. Otherwise the market could easily be distorted by state aid. However it’s far from simple in practice and is something the member states have been arguing about forever.

The rest of the eu has never been happy with irelands tax policy but since taxation is a national competency they can’t do anything about it directly. They can however frame it as state aid and try to attack it that way.

Edit to add, information on how state aid works in eu context: https://enterprise.gov.ie/en/what-we-do/eu-internal-market/e...

[tick_tock_tick]

Ireland gave Apple a tax deal. The EU is arguing Ireland as part of the EU is not allowed to set it's own tax policy. The lack of clarity is Ireland's claiming it's still a sovereign nation and can set taxes but the EU says no you're not.

[s1artibartfast]

That's not true. EU nations set their own tax policy freely. That's why the EU is claiming it isn't simply a tax issue, but a hidden subsidy. The EU already lost once, but they are trying again

[tick_tock_tick]

If lower tax rates are a "hidden subsidy" then clearly they can't set their own tax policy freely....

[CamperBob2]

What do you tell your CPA to do, when tax time rolls around?

[gigatexal]

If I was Apple or any other megacorp I would happily pay the taxes and pay them publicly because of all the goodwill and favors and all the greased politicians and folks it can buy.

It’s less hassle than lawyering and cheaper and instead you can focus on building relationships or getting other benefits than hoarding cash which Apple clearly can print like a central bank.

[londons_explore]

That might be the case for super local taxes (eg. Paying land tax to the town), but for nationwide taxes even a big company makes basically no difference. Therefore, politicians don't really care - it isn't their money and doesn't directly impact them.

[ant6n]

Seems like there would be cheaper ways to buy good will greased politicians.

[newZWhoDis]

Elon paid one of the largest (the largest?) personal tax bills ever.

How’s that working out for him?

[gigatexal]

Well he does enough self owning to erode any good will he’s ever earned. You can’t fix stupid. The man is a genius but socially very stupid.

[generic92034]

But someone would not have been promoted (or would not have gotten a huge bonus) without taking advantage of that perceived tax loophole! /s

[LanceH]

They paid taxes according to the laws of a sovereign nation. Seems like a done deal to me. Europe should get their affairs in order.

If Ireland shouldn't have done that, that's not Apple. It really seems like a case of "the law should have been", which seems to work in Europe.

[lokar]

In regards to taxation and regulation of services sold into the EU common market Ireland is not fully sovereign. They have their act together, this is the legal process playing out.

[Kamq]

Aren't they still sovereign? They just might be sanction/fined by peers or kicked out of the union if they don't comply?

It's not like someone's going to declare war on Ireland and conquer them to force compliance the way a citizen breaking the law might be conquered by a police force.

[ben_w]

The winning move for a single round of the Prisoner's Dilemma is to defect.

The winning move for the Iterated Prisoner's Dilemma is tit-for-tat.

Enforcement mechanisms lead actors to behave more cooperatively, and everyone knows everyone is better off if everyone is cooperating.

[Kamq]

That doesn't make anyone in the game not sovereign

[izacus]

The fact that they're being in this mess absolutely means that they did not pay taxes according to the laws. Did you miss what the article says?

[yieldcrv]

it just means a tax authority disagrees with someone rich enough to see what a court thinks

public servants don’t know their laws better than private lawyers do, one of the beauties of using lawyers is that the public servants don’t know which legal rationale you are using and have no way to find out except in the court.

this is often a deterrent for them to bother, because they know they can be wrong or completely blindsided by a mixture of laws they never considered.

in this case, it wasn't a deterrent and we will find out.

but just because a tax authority disagrees doesnt mean the defendant was not compliant according to the law. it means the calculators are different and everyone has to figure out why.

[objclxt]

> Did you miss what the article says?

Yes, I read it, including the bit that said the Irish government told Apple their tax affairs were legal.

Apple paid taxes according to the laws that Ireland had at the time. The issue is not that Apple did not pay taxes according to the law, it’s that the laws themselves were incompatible with Ireland’s other obligations.

[closewith]

> Apple paid taxes according to the laws that Ireland had at the time.

The TFEU/Lisbon Treaty is law in Ireland and the allegation is that the deal between Apple and the Government was in breach of Article 107, which regulates State Aid.

The ultimate arbiter of whether the deal was lawful is the CJEU. Until decided there, it is uncertain whether Apple acted lawfully.

> The issue is not that Apple did not pay taxes according to the law, it’s that the laws themselves were incompatible with Ireland’s other obligations.

This just fundamentally misunderstands the relationship between member states and the EU. The EU Treaties and subsequent Regulations (although not Directives, which must be transposed into law nationally) are actually laws across the bloc. Not foreign treaties, not state obligations, but actual laws. Furthermore they take precedence over national laws and can be enforced by the bloc at a judicial level.

In addition, whether the Government of the day gave assurances of lawfulness or not, all large enterprises know that only the courts can actually decide whether a deal is lawful or not. This is the same in most democracies, including the US.

[hef19898]

Ireland being in the EU, and Apple doing business across the EU, means that Irelands opinion might not be the last or valid one.

[vkou]

They paid taxes according to their twisted interpretation of the laws.

A number of governments seem to disagree with that interpretation.

[collaborative]

Europe is fine the way it is. Nations should be sovereign and common economic policy should be policed via fines such as this one. Hopefully this way corpos will learn that tax dodging in Europe is counter productive

Trying to fix this via fiscal union leads to more brexits

[pyrale]

> What's the cause of all the flip flopping between Apple having to pay the bill or not?

Basically, since Apple is located in Ireland, they must pay their taxes to Ireland. But Ireland doesn't really want Apple to pay, so that makes it complicated. The real beef is between Europe and Ireland about whether it's legal to offer "personalized" discounts, not about Apple.

relevant quote:

> it reaches back a few years, beginning with a decision in 2018 that told Apple to hand over the aforementioned €13 billion to Irish tax officials after the European Commission decided Apple and Irish authorities had together broken state aid rules.

[doikor]

> What's the cause of all the flip flopping between Apple having to pay the bill or not?

The justice system. Basically going trough the various EU courts due to appeals.

[sgjohnson]

> What's the cause of all the flip flopping between Apple having to pay the bill or not?

Ireland doesn’t want Apple to pay.