Europe wants more of Tim's shareholders' money.
The EC is looking into Apple's (NASDAQ:AAPL) Irish subsidiary and its (ahem) 'complex' tax arrangements. It's not the only multinational accused of legally playing this game, but it's certainly one of the biggest. How dare a bunch of foreigners tell an American company what to do!
Meanwhile, Irish authorities are putting on their best innocent face. I guess 3.7% of something is better than nothing.
In IT Blogwatch, bloggers wish that they could pay less than 4% income tax.
Your humble blogwatcher curated these bloggy bits for your entertainment.
The European Commission is to open a formal investigation into Apple's tax arrangements with Ireland. ... Last year, the Commission began an information gathering exercise into the tax arrangements for multinational companies...after a US Senate committee accused Ireland of giving special tax treatment to Apple.
EU state aid rules are designed to prevent unfair practices. ... When asked about an investigation...Taoiseach Enda Kenny said that overall an international response is required [and that] he believes our legislation is very strong and ethically implemented and we will defend that robustly. MORE
Senator Carl Levin, chairman of the [Senate] subcommittee, said the Apple structure represented "the Holy Grail of tax avoidance." Apple...entered into deals with the Irish subsidiaries...helping ensure almost no tax was reported in countries such as Britain or France [and] helped it achieve an effective tax rate of just 3.7 percent on its non-U.S. income last year.
Technology companies such as Google...and Microsoft...have cut their overseas tax rates to single digits by establishing Dublin-registered subsidiaries...tax resident in Bermuda. MORE
Ireland is often accused of facilitating the movement of money and profits around the world using a trick called the double Irish Dutch sandwich. ... Income collected by Ireland-based companies [is] paid as “royalties” to a Dutch entity, incurring a tax credit in the emerald isle along the way. The “royalties” are then sent back...to Ireland, a transaction that does not attract taxation.
The G20...in November will consider the matter. ... Host nation Australia is already making it plain it wants the topic on the agenda, perhaps spurred by the fact the likes of Google, Apple and Microsoft pay rather less tax than seems fair. MORE
The news...follows up from allegations that the iPhone and iPad maker used loopholes in international tax laws to reduce its overall payments. ... Apple previously said it complies with the law.
Sen. Carl Levin (D-MI), the chair of the U.S. Senate Permanent Subcommittee on Investigations chair, said Apple was "exploiting" a tax loophole in U.S. tax code. ... Apple chief executive Tim Cook was forced to defend himself and the company [saying] that 61 percent of all Apple's revenue was earned outside the U.S., and that Apple...paid in taxes to the U.S. Treasury...about $16 million per day. ... The U.S. Securities and Exchange Commission later cleared Apple's tax strategy.
The company has also been accused of hiding more than $1.3 billion...in Italy. MORE