Will Ireland's corporation tax survive?


Nothing you’re posting makes any sense.

Revenue isn’t taxed, profits are taxed. Marketing is an operating expense.

Apple was selling products at higher price than their competitors, they weren’t “stealing” market share they were winning it.


“Revenue isn’t taxed, profits are taxed. Marketing is an operating expense.”
The point is their profits weren’t being taxed and as far as I can see they weren’t paying dividends at the time which allowed them to store up a nice big war chest allowing them to do things like invest in marketing on their higher priced lower specced product and commit to component suppliers to take as much as they could supply as long as they gave nothing to the competitor.
Unfair tax advantages gave them the breathing space to dominate a market to which they were a late entrant. Their competitors lived quarter to quarter. Apple had the luxury of time courtesy of good profits elsewhere to strategise how to drive competitors out of a market they wanted to be in.


The attribution to a head office is the actual ‘exemption’ but that’s not enough detail. What was the basis of apportionment and more importantly, regardless of whether it reflected economic reality, why was it only allowed to be used by Apple? The latter is a requirement for it to constitute state aid.

I posted the press release - it doesn’t have this information.


Literally, any sales made in Ireland were attributed to the local entity and taxed. Any sales made outside Ireland were attributed to “Head office” and not taxed. Why? The same reason a dog licks his balls – because they can.

Why was it only used by Apple? Well, we don’t know it was only used by Apple. There might be more. What we know is that Apple told the government that it was “re-evaluating” its European operations and wanted comfort on its taxation, so Revenue wrote the letter allowing Apple to do this. It’s a bald exemption from corporation tax for a specific company.


Unless the commission have evidence that permission to do this was only granted to Apple, they have no proof of illegal state aid, and their ruling is groundless.

This is the very heart of the case, not the transfer pricing arrangements or our residency rules. The press release is silent on it. Why?


“Give us an exemption or we’ll move our factories out of your country” - why does it matter if Apple was the only one?


Well I never got that exemption :slight_smile:

It’s blatant favouratism. They threw out the corporate tax code for them. If everyone could do it they wouldn’t have needed a letter.


The iphone came in 2007 for Apple off the back of around 3B profit over the entire previous 10 years combined.

In the mid 2000’s Nokia was earning 4B profit a year.

The vast Apple cash pile is due to the iphone, it’s not the reason Apple were able to make the original iphone.


not talking about iphone. a lot happened before the phone and with an emerging market being a mid sized company means you get pushed out by a large company like Apple. You just need to be the best resourced in to the pond that you are jumping in to.


Nope. Apple had $15bn cash in 2007 already.


Didn’t Lisbon II guarantee that the EU could not interfere in Ireland’s tax affairs?


If other companies allocated profits to non-resident companies on a similar basis, it’s not state aid and the case is groundless.

Given that the commission appears to be silent about this, but very loud about transfer pricing and is literally encouraging other EU members to try to grab a share of the fine - I have my doubts. The press release is rabble-rousing stuff.


It’s not. It’s insisting that Ireland applies our own tax law equally to all. Failing to do so leads to distortions in the internal market.


The whole decision hinges on this issue.

I am looking forward to a more detailed decision in due course which should have more clarity on this.


So companies can just “allocate” profits to non-resident entities?

No. They can’t. If revenue made a series of secret exemption of favoured companies they’re exemptions because standard tax treatment say you can’t “allocate” profits like this. Are ordinary non-favoured companies entitled to this? Are they fuck!

Why did they need the comfort letter from Revenue? Because they were interpreting tax policy in ridiculous way.


ironic that this came to light because of a US Senate committee investigation


WWN hits it on the head
waterfordwhispersnews.com/2016/0 … -to-apple/


share price of apple isn’t suffering. Banana Republics don’t dictate terms to multi-nationals so I’d guess the market doesn’t expect Ireland will ever come looking for the tax owed.


I suspect it’s been priced in for a while.


Was the contractor Irish or foreign owned?


The contractor wasn’t available in the middle of the night to ask.