Off Topic Thread 3.0

awec wrote: »

We'll appeal, we have to really. It'll drag on for years.

Yes, we'll appeal and Apple will end up paying some of the amount in other countries.

How many other companies (if any) had the arrangement Apple did? Is it true it was a rate of like 3% that dated back to the Haughey era?

awec wrote: »

The state doesn't really take it.

We aren't allowed to spend it on any government initiatives or anything like that, it has to be spent on the debt.

So no new hospital beds, gardai or anything of the sort.

This is a moot point because Apple won't pay us 13bn, we won't allow it, and if we do get any payment from them it'll be years down the road but... If we got a big windfall that we had to put back into debt. Would it reduce or payments in any significant way and allow us to free up some money to spend on services? i.e. even if we can't spend it directly would we indirectly have more money to spend on services?

b.gud wrote: »

This is a moot point because Apple won't pay us 13bn, we won't allow it, and if we do get any payment from them it'll be years down the road but... If we got a big windfall that we had to put back into debt. Would it reduce or payments in any significant way and allow us to free up some money to spend on services? i.e. even if we can't spend it directly would we indirectly have more money to spend on services?

Edit. This all based on stuff ive seen elsewhere. I'm not in any way knowledgable on this


Its complicated. The basic assumption is that 13bn less in debt = less debt to services = less repayments less interest = more money to spend elsewhere. From what I have heard, it isnt that simple

Firslty: A lot of our debt has fixed repayment dates (bonds with a agreed date of repayment) so we may not be able to immediately reduce our debt rates and if we could, there may or may not be penalties if we try to pay it off early.

Interest costs are extremely low and the cost of debt is very little to service now days (although it is likely to only go up in the medium term, not much scope for it to lower further)

We are still caught by EU rules regarding our budget. As its a windfall payment it doesnt count on tax taken in so we can only rely on our normal tax take to set out budgets

The knock on consequences could also be stark. This may or may not lead to a fall in fdi spend in Ireland, or a fall in numbers employed, if the companies based here and looking to base here feel that Ireland is being targeted. That could lead to a lesser take tax overall.

b.gud wrote: »

This is a moot point because Apple won't pay us 13bn, we won't allow it.

Absolutely right the government won't allow it.
Sure what sort of example would that set?? That loans are something that are supposed to be paid off eventually?

MADNESS!!!
Imagine the fallout...people who stopped paying their mortgages years ago might be expected to restart payments!!
Nuts. Just can't be happening.

irishbucsfan wrote: »

It's nothing to do with loans. The problem from the EU's perspective is that the Irish government attracted Apple's investment into Ireland by offering them a rate which is too low in the opinion of the EU (IE, lower than France, UK or Germany could match). The EU is built around the ordoliberal principles of 20th century German economics and part of that means that the most important aspect of the EU is keeping all of the states competitive with each other (which is why the EU's competition commission is the biggest part of the EU government). The EU commission is trying to reign us in to stop us from attracting investment in this way.

The EU don't give a single **** if we don't make a single cent in corporate tax from Apple so long as they were paying more tax elsewhere across the EU. And that is exactly what is going to happen now. They're gong to make their findings public and other tax bodies are going to make offers to Apple to declare parts of this tax in other jurisdictions so as to reduce their liability as far as possible, and by the time it's all finished we'll seeing a much smaller amount of the money. But it's still a positive thing that the money will go down to freeing up state capital, forgetting of course the fact that we're paying debt due to terribly regulated French/German banks in the first place.

To be a little pernickety I always understood that the problem was not the rate that we offered but the way that we treated earnings from other jurisdictions. Basically that there's an incompatibility between our tax laws and other states tax laws because profits are paid at a different point. To put it in extremely simple terms I understood that they export profits from other countries before taxes are due there but after the point at which taxes are due in Ireland thus avoid taxes.

If I'm wrong (and I very well could be) hopefully someone will be along shortly with an authoritative clarification.

irishbucsfan wrote: »

Yes that's basically the mechanism through which they enable them to do this. They attribute the sales to companies outside of the EU from Ireland in ways that mean they aren't taxable in Ireland. The EU were only able to squeeze us on it because Apple got a slightly different deal to some other companies, which is the illegal part, the practice itself wasn't actually illegal. The commision's press release actually goes into detail quite well: http://europa.eu/rapid/press-release_IP-16-2923_en.htm

Thanks. I've no issues with us competing on tax rate, AFAIR effective corporate tax rates are in the end very similar across Europe. I do think that laws should change to end this kind of tax avoidance though (the bit that's currently legal). I expect that others will take up the slack but it's just not the right thing to do IMO.

At this stage, I'm sick of the pathetic levels of tax that corporations pay, not just here but across various tax havens across the world. The fact we're appealing this is pathetic as well.

"Won't someone please think of the chil- jobs/investment!?"

I get that we might lose some, but foreign investment in Ireland isn't going to collapse if Apple end up having to pay this back.

Zzippy wrote: »

Easy for some of us to say as we're not employed by foreign multinationals, but I tend to agree.

I know you weren't referring to me, but I am actually employed by a foreign multinational.

Dave_The_Sheep wrote: »

At this stage, I'm sick of the pathetic levels of tax that corporations pay, not just here but across various tax havens across the world. The fact we're appealing this is pathetic as well.

"Won't someone please think of the chil- jobs/investment!?"

I get that we might lose some, but foreign investment in Ireland isn't going to collapse if Apple end up having to pay this back.

While I agree in principle this can only work if every other country buys into it. If they don't literally all we are doing is shooting ourselves in the foot. I'd love if we could live in a world where fair was the norm. But we don't and probably never will. We have to play by the rules of the real world rather than the idealistic one we'd all love to be in. Otherwise we'll just end up hurting ourselves and the tax avoidance/evasion will continue regardless.

Dave_The_Sheep wrote: »

If you follow that to it's logical conclusion, then we should let corporations pay no tax. Similarly to the "too big to fail" idea, once you decide that - they own you, plain and simple. I'm not quite ready to accept that yet.

The logical conclusion isn't that they pay no tax. They should be paying a fair rate of tax, however it's up to individual governments to determine what that is not the EU who aren't supposed ot have fiscal control over us (but do due to various reasons now).

Also, the too big to fail idea is only true because of lousy governance, noone should really be accepting it. The French and Germans are much more guilty of that than we ever were, but guess where that 13 billion would end up if we took it from Apple?

IBF wrote:

The logical conclusion isn't that they pay no tax. They should be paying a fair rate of tax, however it's up to individual governments to determine what that is not the EU who aren't supposed ot have fiscal control over us (but do due to various reasons now).

Also, the too big to fail idea is only true because of lousy governance, noone should really be accepting it. The French and Germans are much more guilty of that than we ever were, but guess where that 13 billion would end up if we took it from Apple?

Aye, indeed - but it's still true. I'd also see this as also lousy governance (not just in Ireland). I'm not under any illusions that Ireland's getting this money, the best we can hope for is a way to get rid of some of the national debt - going to the French and Germans.

molloyjh wrote: »

That's only true if you follow it to its logical conclusion in isolation of everything else. Governments need to get their revenue and if they had an official policy (or even an unofficial one) that all of it came from individuals income and expenditure then they'd soon find themselves unelectable. So they need to balance it somewhat.

The balance is entirely skewed, in this particular case, and it the case of plenty of multinationals, not just Apple - and not just in Ireland. To be honest, politicians might find themselves unelectable - but what do they care if they're taken care of by lobbyists and the corporations they're helping? I'm not saying all politicians are corrupt, but it's not a stretch to look at how things are in the US and think that the entire setup is rigged from the start, and they don't really care about being electable. I don't think Irish politicians are any less susceptible to that form of bribery/corruption (let's call it what it is).

Anyways, I'll leave it there - even if this is the Off Topic thread. I guess I'm just a bit tired of our society being there to service the economy and not the other way around, which is how it should be.

Dave_The_Sheep wrote: »

Aye, indeed - but it's still true. I'd also see this as also lousy governance (not just in Ireland). I'm not under any illusions that Ireland's getting this money, the best we can hope for is a way to get rid of some of the national debt - going to the French and Germans.

That may not be the best we can hope for. It's hard to say without access to all of the information. Don't forget that if we go after this money then people ahead of us in the chain may also be going after the majority of the money (IE the nations where these sales actually occurred, which was not Ireland). This is us attempting to recoup tax money for sales that never occurred in Ireland and that only went through Ireland BECAUSE of the deal. It will directly lead to a weakening of our position in attracting foreign investment and be a huge blow to organisations like the IDA. Worst case scenario is we lose all of our attractiveness for overseas investment in return for very little money to pay down overpriced Irish debt owned by banks elsewhere in Europe.

It will be a huge victory for the EU in their quest to wrestle control of fiscal policy away from peripheral member states (which is not something we ever agreed to or signed up for). This is something they've shown a total inability to implement successfully so far in their complete failure to deal with multiple problems, even falling victim to excelgate, and it's something we should be totally opposed to after the mess they left behind themselves in what came to be known as the PIIG nations (albeit Draghi has done well to claw back their reputation).

The problem with how the EU views fiscal policy, and why German policy just doesn't work when spread out across an entire continent, is pretty well laid out in this fairly quick podcast discussion: https://hbr.org/2013/04/austeritys-big-bait-and-switch (also in the referenced book).

Rather than seeing a benefit from this I think you'll actually just see more behaviour like this from the English, French and Germans: http://www.telegraph.co.uk/technology/2016/08/30/apple-ordered-to-pay-11bn-after-european-union-tax-investigation/ and Apple will end up paying tiny amounts of tax in London, Paris or Berlin instead (see Vodafone as to how this is still very possible outside of Ireland but within the EU).