Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, CCCTB


Damn right Pill. Outstanding work by Observer.

Let me broach another angle on this . You may have noticed that Apple/Facebook/Amazon ( which contains Dropbox/Netflix)/Google and Microsoft are frantically building Datacenters in Ireland these days.

There a lacuna in EU VAT rules which allow a country to charge ‘collection fees’ to another. EG a transaction out of an Irish DC to another VAT Jurisdiction will result in a payment to Ireland and that other country both, until 2018 at least I think and probably thereafter it becomes permanent.

The Irish Vat take is proof of domicile in Ireland for economic activity purposes as I understand. iTunes was based in Luxembourg unlike other Apple activities as Luxembourg VAT is only 15% but I hear it is in Dublin nowadays. While a Luxembourg consumer will still pay 15% VAT on an itunes transaction in an Irish DC I think the Revenue keeps a % of that 15% and not all of it goes to Luxembourg and the Revenue is an agent of every other EU revenue in terms of ensuring the forwarding of the monies collected…minus its own cut. OTOH we pay 23% to iTunes since 2015, not 15% to the Lux Revenue as was the case.

I’m sure VAT will rest a tad, on occasion, on its way out. :slight_smile:

Someone else might have more on this VAT agreement and the minute details, all EU transactions on Google Play, Facebook and iTunes will be handled in/from Ireland by late 2017, not sure about Netflix. … vices.html


A question that no Irish media have asked, AFAIK: why did the cabinet need to agree to lodge an appeal by the end of the day yesterday? The full EC ruling isn’t even available yet.
Is there a good reason, or is it because Tim Cook told Enda Kenny to do itty Friday?


Because Microsoft Facebook Google and Amazon expect the Irish Government to protect them too. Think of all the children Mantissa. :slight_smile:

It was the US Senate wot nabbed Apple, the EU Commission merely clarified some aspects of what they found out in reaching their decision.


When the IRS gets their teeth into this, sooner or later, the really interesting question is when will the IRS start using some of the laws passed back in the 1960’s and 1970’s against tax shelter vehicles, extensively prosecuted at the time, which all became moot post 1982/86. In Apples case pretty much every single last bit of i.p was created in Cupertino. Its not like they have the wriggle room that MS and Google have with their international dev centers. Even though all the important stuff is still done in Redmond and Mountain View. Given some of the case law from back in the 1970’s regarding professional services companies trying to reassign income to third party low tax structures if the IRS ever decided to prosecute the offshoring of i.p then Apple really are toast. There are double penalties on that kind of stuff so that few hundred billion offshored would very quickly disappear in penalties and fines.

This show is going to run and run…


Absolutely this show will run and run.

How many times have we been frightened by electoral candidates in the US promising to deal with offshore profits? Yet when Apple get threatened by the EU, the White House weighs in.

Nothing changes.

Henry Temple, 3rd Viscount Palmerston noted to the House of Commons in 1848 that … Palmerston

Nicked by that C*** Henry Kissinger


Matheson promise a corporation tax rate of only 2.5% using their special ‘structures’, bless em .

From > … h_2013.pdf

#61 … monn-odea/

Eamonn O’Dea
of the International division of the Revenue Department.

IMHO, part of the problem, part of the big system that has led to gross unfairness, morally and probably unjustly, in the Irish Taxation mess that is present.

He did a Morning Ireland interview at the end of last week on RTE Radio 1 where he played out the political line on behalf of TPTB of which he is clearly a part as the Apple story was breaking. … -1.2774804

One to watch out for if you come across him.


2pack. What a fucking wonderfully inept and inappropriate use of the word.

Apart from the smiling in the meetings as the ladies and lads from Mephistopheles explained how things work here…


It’s not unheard of for senior Revenue to retire and then work for the top tax consultants…

I think the recruiters in those practices will be watching out


Here is an interesting list of current high tech players in Ireland…

The really interesting number is revenue per employee.

You have to go down to number 12 before you find Intel, who actual do something substantive in Ireland. Their revenue per employee is around $500K… which is not bad. Any company whose Irish operation has a revenue per employee much above that is a tax scam operation. Which is almost all of them.

Bear in mind that MS et al also have brass plate operations in Ireland whose revenue is often greater than that of the “official” subsidiary. In MS’s case before they hid it in embarrassment by making it a private company it had at least twice the revenue of the “ligit” subsidiary.

Its tax shells all the way down…


I see we’re on the Brian Lucey twitter now Ted

brian lucey ‏@brianmlucey 4h4 hours ago

Ok, I know , its Saturday evening. But please, do read this thread on #AppleTax viewtopic.php?f=4&t=66347
Really quite excellent
24 retweets 28 likes

Owen Callan

@brianmlucey @WhelanKarl “Excellent”? Christ, it’s awful. It’s a weird mix of facts, quasi facts, and complete bollox.


11:24 PM - 3 Sep 2016
1 retweet 2 likes
Urlofcork Tweet text

@OwenCallan @brianmlucey @WhelanKarl Does anyone want to name Observer35

Add photos or video

brian lucey ‏@brianmlucey 16m16 minutes ago

@OwenCallan @WhelanKarl aka the pin. The nuggets though...


brian lucey ‏

Wait, did Brian Lucey’s just imply the Pin was a mix of facts, quasi facts and complete bollox??

I guess Brian has learned his lesson from endorsing complete bollox he read on the interwebs. e.g. his Eircode screed, the deposits are an asset brainfart


No, that was Owen Callan.

It’s not a bad description of the Pin, except he missed out opinions, wild rants and tinfoilhattery. :smiley:



WTF is a quasi fact?? :open_mouth:


So just like, except with far less academic pseudo-scientific econometric bolloxs. Remember, when a non applied mathematician wraps what is essentially little more than political / ideological opinions in very fancy equations this does not make it “science”. Or maths for that matter. It is still a political opinion. Wrapped in unprovable equations. Misrepresented as scientific.

And thats about 95% of modern economics.

At least in the old days they had the honesty to call the discipline political economy, i.e… a social science. Just like sociology or anthropology.

Our bollox does not have affectations of self-importance.


That one’s from Owen Callan, so I wouldn’t waste energy trying to interpret!


It’s the half-truth’s weird cousin,?


The US Treasury “White Paper” is very interesting, you can find it here…

First, the guy who stuck his name to the top of the paper is someone with a law degree who is a career party hack. Started in Tip O’Neils office back in the '70s, part of every Dem administration since, and who’s only foray into the business world was a few years before the '08 Crash at City running a division that specialized in operating very creative derivative vehicles through some of the most scenic tax havens in the Caribbean. An odd choice for COO in so many ways. Or maybe not.

So the classic current administration Pay to Play operative. So no mystery about the paper or its tenor.

Next the executive summary. After reading the three points my reaction was, is that all you’ve got? The main complaint is that the EU is “not playing by the rules”. Except that each of the three “complaints” has been committed on multiple occasions by both the Treasury, Executive and US Courts in the past going back many decades. The US has a very long history of all three complaints and has acted on multiple occasions in the past where it considered US law and US ruling as having precedent over foreign law, international conventions, and have been applied retroactively.

So the papers position is the legal equivalent of clutching at straws.

The rest of the paper only mentions Apple in passing and makes a long of case law arguments about why none of the other US companies under investigation are guilty. Its almost all about the other companies. The paper makes no real attempt to defend Apple because they really have no defense from case law.

One first reading the biggest weakness for the Treasury position is the first test for state aid “(1) is financed by the State or through State resources”. They are trying a defense using a facile reading of this test.

In the real world if we have company A and company B. And both would owe $100M in tax if operated in a standard trading manner. That is $200M on the states balance sheet. A tangible asset. Now if the state decided to forgo collecting that $100M for company A that is a net transfer of tangible assets from the state to company A. That $100M in tax owed would be a liability on company A’s balance sheet. That transfer of $100M, the nullification of the tax liability by the state, is under the definition of state aid state financing of company A no matter how you try to cut it. But I’m sure the lawyers will spend years arguing otherwise.

Now company B pays its $100M in tax. Thats the selectivity test satisfied. Apple had a different tax regime from Google, MS etc…

Scale up and add lots of complications but thats the legal position in a nutshell.

Starbucks and Amazon will probably get off eventually but Apple with their cute hoor stunt of a null tax residency are basically fucked. The only thing that will save Apple is a very long war of legal attrition. Which I am sure they are gearing up for.


Who knows for sure. Maybe a Quasi fact is a fact that hangs out in bell tower in Notre Dame ?