Archive for August, 2016
Apple has been caught illegally dodging billions in tax. The European Commission has ruled today that Apple should pay €13 billion in unpaid taxes to Ireland under illegal state aid rules. .
This is great news, but we know there are many more cases of corporations dodging tax that go unnoticed or where investigations don’t lead to sanctioning . Now that all eyes are on Apple, we have momentous opportunity to call on them to persevere and side with the European people by demanding real transparency.
After years of pressure from people like us, in these very months the European Union is looking into forcing corporations to be transparent about how much tax they pay. That way everyone can see if they have tried to hide profits and how much they actually owe. Corporations are putting all their lobbying power against thisproposal. We have to be stronger than them.
If the law the EU is preparing ends up with the lack of transparency corporations want, we wouldn’t get information to monitor whether they do aggressive tax planning and profit shifting, and we’d get it from fewer than 15% of them [3, 4]. It would mean that corporations can simply shift their profits to tax havens and continue to dodge tax.
The Commission has done a good job of investigating and sanctioning Apple, but investigations take a long time, and only scratch the surface of the problem. It is still addressing the symptoms but failing to treat the disease.
Over 80,000 Europeans who are part of our WeMove community already joined the tax justice movement. There are many more corporations avoiding taxes, and if we are to to stop it, we need the Commission and the Council to act.
Thank you for standing up for tax justice,
Virginia (Madrid), Julia (Warsaw) and the WeMove Europe Team
PS. Real transparency means that all companies in the EU are obliged to report publicly, no matter where their headquarters are; that they report on their activities in all countries, not just EU countries; and that 85% of companies are not exempted from reporting.
Just minutes after the excitement over Apple’s new product announcement hit, The FT drops a rather more painful headline stating that Apple will on Tuesday be hit with Europe’s largest tax penalty after Brussels ruled that the company received illegal state aid from Ireland. Despite Treasury Secretary Lew’s pleas/demands just a week ago that the EU back off, the company will have to pay billions of euro in back taxes to Dublin as the European Commission moves to redraw the boundaries on aggressive tax avoidance by the world’s biggest corporations.
A week ago, Jack Lew implored Europe to reconsider…
After a meeting with U.S. Treasury Secretary Jack Lew last month, the European Union’s antitrust chief Margrethe Vestager tweeted a photo of herself standing awkwardly next to the American finance chief, with the two of them facing in slightly different directions.
It was a “very good meeting,” she tweeted. But the photo was fitting, for the two were far from seeing eye-to-eye over the EU’s investigations into the sweetheart tax deals some multinational companies have sealed with various European governments.
The trans-Atlantic discord could deepen this fall when the European Commission, which holds the bloc’s antitrust authority, is expected to decide on some of its biggest cases, including one involving Apple Inc. The commission could require the companies to pay back large sums in unpaid taxes.
But it appears Washington’s might has been overlooked as The FT reports that Vestager circulated the final ruling to her counterparts in the EU’s executive branch only on Monday morning, deploying a fast-track procedure in a bid to minimise leaks. The usual notice period is two weeks.
A 130-page judgment by the commission follows a three-year investigation into claims that two advance tax opinions issued by Dublin violated EU law by granting Apple an advantage not available to other companies.
The decision is set to be the subject of appeals in the European courts by Apple and Ireland, both of which have denied any wrongdoing.
The commission’s ruling calls on Dublin to raise a new tax assessment on Apple, which previously warned the US Securities and Exchange Commission that an adverse decision by Brussels could have a “material” impact on its finances.
One person familiar with the inquiry said Apple will have to restate its accounts as a result of the ruling.Investigators have examined how Apple paid a tax rate of less than 1 per cent on European sales — far lower than Ireland’s headline 12.5 per cent tax rate on business profits.
The commission is concentrating on the tax treatment of Apple’s intellectual property assets, a hotly disputed area likely to lead to a large claim for back taxes.
Although the decision itself does not specify the precise amount of money in play, Ms Vestager will set out an estimate when the findings are released on Tuesday, according to people briefed on her plans. Several people briefed on the findings in Brussels and Dublin believe the liability will run to billions of euros.
The Starbucks and Fiat rulings are under court appeal, and investigations continue into Amazon’s arrangements.
Clearly, the ruling marks a setback for the Irish government, which has moved in recent years to unwind the most contentious elements of a corporate tax regime that has long irritated other EU member states.
“The government‘s case is very robust,” said Ireland’s finance ministry. “The minister has indicated previously that any adverse ruling should be appealed in the European courts and will recommend that course to cabinet.”
How long before we hear calls for IreLeave?
And how long before more European banks face fines for various money-laundering charges or mal-treatment of investors? The ‘tit’ for this ‘tat’ – just as American hegemony is being called into question globally – will likely be large.
In a recent interview with the Un News Center, Peter Sutherland, the United Nations Special Representative of the Secretary-General for International Migration, declared that “sovereignty is an absolute illusion that has to be put behind us.”
“I will ask the governments to cooperate, to recognize that sovereignty is an illusion — that sovereignty is an absolute illusion that has to be put behind us. The days of hiding behind borders and fences are long gone. We have to work together and cooperate together to make a better world. And that means taking on some of the old shibboleths, taking on some of the old historic memories and images of our own country and recognizing that we’re part of humankind.”
“Refugees are the responsibility of the world. They’re the responsibility of the United States, of Canada, of Latin America and of Asia, as well as Europe. Proximity doesn’t define responsibility.”
Sutherland continued by drawing upon the standard progressive narrative that anyone who disagrees that “sovereignty is an absolute illusion” is just “racist and xenophobic, and [ought] to be condemned.” Wow, won’t you please tell us how you really feel?
“[But] in the European debate, there have been areas, there’ve been pockets of political activism, which I consider to be racist and xenophobic, and [ought] to be condemned.”