Tuesday, August 30, 2016

This is the highest penalty in the history of the EU. Apple will pay 13 billion euros for tax evasion. It will be retaliation from the US? – Gazeta.pl

“A Member State can not confer tax benefits selected companies – this is incompatible with EU state aid rules. On the Commission’s investigation it shows that Ireland has granted Apple an illegal tax benefits, which allowed the company to pay much less in taxes over the years “- stressed the EU Commissioner. competition Margrethe Vestager, in a published statement.

the penalty imposed on Apple (13 billion + interest) will be transferred to the Irish government. Dublin will not be able, however, to allocate money for the budgetary expenditure. They are to be recorded as extraordinary income to reduce debt.

So far, the highest penalty imposed by the Commission for tax fraud related to the French energy giant EDF, which had to pay 1.37 billion euros for the use of unlawful State aid. This amount was due to 889 million tax exemption received from the French government and the 488 million euro interest.

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 Head of the Commission European Women Álvaro Millán / Flickr.com

Optimize Irish

the investigation of tax preferences used by the Irish authorities in relation to Apple was initiated in June 2014. The then European Commissioner for. Competition Joaquin Almunia referred to the two agreements concluded between Apple and Dublin in 1997 and 2001, the year. Cupertino giant was through the use of highly preferential rates of sales in Europe.

The kind of tax optimization corresponded to two registered Irish company owned American company – Apple Sales International and Apple operations Europe. they are responsible for the financial operations Apple made outside the US.

from the findings of the European Commission shows that these companies have the advantage of special records tax, which allowed Apple to save billions of dollars in corporate tax.

anonymous source cited by the newspaper “Financial Times”, even suggests that the Cupertino company paid in Ireland sales tax at less than 1 percent., while – and so attractive – CIT rate in this country is 12.5 percent.

From Bloomberg calculations show that only in the years 2004-2012 the Cupertino giant is able to reduce your tax burden in Europe by more than $ 8 billion.

in exchange for the tax preferences Apple had to develop its activities in Ireland and create new jobs. The American company employs there ok. 5.5 thousand. employees.


Apple weapons, State Department attacks

Apple from the beginning dissociates itself from accusations from the EC. The company’s management emphasized that their activity in Ireland has been and is entirely consistent with applicable law, and the CIT is discharged properly. Even before the announcement of the decision by the EC, Tim Cook promised to appeal in this case.

“I hope it will be a fair trial. If not, we appeal from the decision, “- said Apple’s CEO in an interview with the daily” The Washington Post “.

On the other hand, at the beginning of the year, in an interview for the program” 60 Minutes “Cook He denied that his company avoided paying taxes. He also stressed that the current tax system is outdated and should be adapted to the “digital economy”.

In his battle with the EC Cook can count on support from the US authorities. A few months ago, a group of senators sent a letter to the Secretary of the Treasury of the United States. According to the politicians, the European tax authorities may allow the “fiscal discrimination” against Apple and other US companies. Senators suggested to consider retaliatory action, if such activities will be continued.

Although the US Treasury Department official did not accede even to their requests, however, recently criticized the Commission European, emphasizing that this institution claims to be a “supranational authority tax.” Some sources suggest that in retaliation for today’s decision of the European Commission, the US authorities may decide to reduce the scale of investment in the EU.

Apple is of course not the only American company that is accused of use tax optimization and avoiding paying due tribute in Europe. With similar charges in recent years they have met, among others, Starbucks, Amazon or McDonald’s.

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Tim Cook was preparing for the worst-case scenario?

Throughout the flavor also adds quite a surprising decision Tim Cook, which – according to reports the newspaper “the Wall Street Journal” – a few days ago decided to release 1.26 million Apple shares worth about 135 million dollars, which he received in gratitude for five years spent as CEO of the company.

Cook sold 334 thousand. Action (prices from 107, 21 to $ 107.69), making his fortune increased by less than $ 36 million . In turn, the 656 thousand. shares were sold on its behalf by Apple as part of the settlement of the tax.

It is possible that Apple CEO so quickly got rid of the jubilee action, because expected negative impact of the EC decision on the stock exchange situation of the company. Perhaps Cook also afraid that the forthcoming strode premiere iPhone does not meet the expectations of analysts and investors?


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