ECJ upholds commission decision on apple tax case

plodder

https://www.boards.ie/discussion/comment/122600506#Comment_122600506

It's still hard to avoid the conclusion that the EU commission used competition law as a Trojan horse here to "get at" Ireland's tax system. How did the commission prove the deal was selective, i.e. wasn't open to other US multinationals here? Ireland had nothing to gain from Apple being the only beneficiary here. What other competitors were harmed by this?

The other thing is that the point of tax rulings is surely to avoid this exact situation from happening. If Apple knew this could happen, they wouldn't have chosen the structure as described. Like does anyone seriously believe that all that business was really done in Ireland? This has to be bad for the EU as a whole if multinationals can no longer rely on tax rulings from member states in the future.

magicbastarder

https://www.boards.ie/discussion/comment/122604528#Comment_122604528

this happens all over the world though? results overturned on appeal to a higher court.

in fact, i'd be much more suspicious if appeals never worked, it'd be a total refusal to admit mistakes.

MrMusician18

https://www.boards.ie/discussion/comment/122604601#Comment_122604601

The problem is that if we acknowledge that lower courts can make mistakes then it stands to reason that the final court can also make a mistake. However only one of those courts gives an absolute verdict - it's infallible. It's quite clearly a flaw of most legal systems

Seth Brundle

https://www.boards.ie/discussion/comment/122604660#Comment_122604660

Are you proposing the possibility of never ending appeals?

MrMusician18

https://www.boards.ie/discussion/comment/122604568#Comment_122604568

The only thing Ireland has had the balls to resist at EU level for the last 15 out of 20 years was tax harmonisation. It eventually caved on BEPS when the US swung behind that system.

But you're exactly right. The foundations of this case were built at the height of the harmonisation argument. That's when the commission decided it would use competition law to cut the legs of tax sovereignty. It was of course politically motivated.

I think the commission expected Ireland to roll over on tax as it had done with everything else which was clearly a fundamental misunderstanding of the Irish position. It rolled over on everything else to keep tax off the table.

Economics101

https://www.boards.ie/discussion/comment/122604672#Comment_122604672

Nah, that only happens in asylum planning cases.😊

Marcusm

https://www.boards.ie/discussion/comment/122604568#Comment_122604568

I would say “impossible” to avoid the conclusion that the state aid/competition approach was used to challenge tax practices. As regards selectivity, the ECJ did not consider that from first principles - it’s a court of appeal. Essentially, Ireland and Apple (but mostly Ireland) failed to establish that the Commission had been wrong in its manner of assessing whether there had been selectivity. The Commission determined that the “normal” taxation system was that if the HO had no functions then all profit was assessed to the branch, ie a two-sided analysis. The actual analysis which would have been consistently applied would have been to look at the functions, assets and risks applicable to the branch and apply an appropriate remuneration for them. This is essentially a one-sided analysis but frankly one which, based on commentary, would have been applied in many jurisdictions if not most. An approach since 2010 which was only legislated for in Ireland in 2022 would support the two-sided analysis (authorised OECD approach for the nerds) but even then that’s regarded as acceptable rather than mandatory in other jurisdictions. There’s a procedural aspect here - if you don’t knock it down at the fact finding level then You are stuck with it. Personally, I think the decision is wrong in its result although it is unchallengeable.

Will Ireland and other countries now look to revise the profit attribution methods for branches, I doubt it. That will make it clearer that Apple’s position was consistent with the normal taxation approach.

astrofool

https://www.boards.ie/discussion/comment/122603033#Comment_122603033

The Knowledge Development Box has also been a big help, 6.25% rate and work must be carried out by skilled individuals so drives interesting well paid work to Ireland:

Knowledge Development Box (KDB) (revenue.ie)

flatty

Of course Ireland was loopholing left and right, and to be honest, the EC ruling was broadly correct I suspect. We will just find more better loopholes. It's what we are best at.

plodder

https://www.boards.ie/discussion/comment/122606127#Comment_122606127

So, are you saying that selectivity was established in the general court, and Apple plus Ireland failed to overturn that aspect (even though they won the case overall)? If that was what happened, do you know what arguments the commission used to prove it? It would seem strange if the onus was on Ireland to prove we weren't being selective.

Or were they just relying on their strange interpretation of Irish tax law (and from what you are saying, tax law in other jurisdictions as well) that if the ruling was against Irish tax law, then it is just assumed to be selective treatment? If that's all they had it sounds very weak.

Marcusm

https://www.boards.ie/discussion/comment/122606833#Comment_122606833

the absolute opposite of what Apple claimed to be undertaking in Ireland.

Peregrinus

https://www.boards.ie/discussion/comment/122604660#Comment_122604660

By "most" you presumably mean "all". But what you describe as a flaw of legal systems is in fact a defining characteristic of legal systems. If a system doesn't offer an authoritative and final answer to questions of law, then it's not a legal system.

Plus, of course, "final" doesn't mean "infallible" This is the reason we have a legislature. If the final conclusion of the court processes is that X is the law, and that's not acceptable, then the legislature can change the law (or, if the law in question is the Constitution, the legislature and the people together can change it).

Mr. teddywinkles

https://www.boards.ie/discussion/comment/122604238#Comment_122604238

Maybe cut back on a whole load of waste including bike sheds

Mr. teddywinkles

Deleted

Boggles

https://www.boards.ie/discussion/comment/122606867#Comment_122606867

We will just find more better loopholes

The "loopholes" were closed which have benefitted Ireland far more than when they open.

We literally fell on the best outcome.

Spending millions defending corporate interest and we get the money anyway.

In a situation that wasn't ideal we got the most ideal outcome.

Bass Reeves

https://www.boards.ie/discussion/comment/122607376#Comment_122607376

No they cannot you cannot change legislation and retrospectively apply it. As well the ECJ found that the tax code was mostly beneficial to Apple only.

While the people can change legislation to contradict EU law we have already signed up ti. Two countries Poland and Hungry were/are at odds with the EU over such an issue and have been sanctioned

for instance we could not pass laws preventing women right to work without infringing EU law

downtheroad

https://www.boards.ie/discussion/comment/122603028#Comment_122603028

What would that achieve in reality? A huge chunk would be spent outside the country by people taking a holiday. Plenty would be wasted in the pub and bookies. The entire sum would be frittered away with very little to show for it in the long run.

The sum should be ring fenced for once off projects/investment, as it is a once off tax receipt.

downtheroad

https://www.boards.ie/discussion/comment/122604369#Comment_122604369

https://whereyourmoneygoes.gov.ie/en/

pauly58

I would expect the money will be quietly paid back to Apple when all the publicity dies down & no more will be said.

Peregrinus

https://www.boards.ie/discussion/comment/122607594#Comment_122607594

We could. We'd have to leave the EU, though.

We might, obviously, choose to stick with the unsatisfactory law rather than leave the EU but we could take either course and it would be our choose which to take.

Just like, we might choose to stick with an unsatisfactory law rather than conduct a referendum to amend the Constitution so tha the law can be changed. We can take either course; it's our choice.

The point is, ultimatelyh legal systems produce certainty; that's an essential component of a legal system. If the system can't authoritatively determine what the law is, it's not a legal system. An inevitable consequence of this is the the legal system might produce and answer that is certain, but unpalatable to Bass Reeves, or to Peregrinus, or to anyone really. But criticising a legal system because it can do this is, basically, criticising the legal system for being a legal system. It's a bit like criticising a kettle for boiling water.

Marcusm

https://www.boards.ie/discussion/comment/122606868#Comment_122606868

Not quite, this is where the end result is a curious one. The selectivity was determined by the Commission in its original investigation and that stands unless overturned by a Court (similar to how a Revenue assessment is binding unless the taxpayer can prove it is incorrect, Mennolly Homes case etc). The General Court determined that the Commission’s position was flawed and set it aside, the Advicate General (adviser to ECJ) advised that the General Court’s decision was on flawed grounds and recommended that the case be remitted to the General Court to correct their errors but the ECJ agreed that the General Court's reasoning was flawed but that it would make the final decision itself and merely confirmed that the Commissipn was in a position to decide on selectivity without reconsidering the issue ab intitio. This is contrast with Fiat and other tax/competition cases.

Many international commentators have said that in their view the Commisison was wrong in how profit attribution to branches works, that the 2010 approach could not reasonably be said to apply to 1991 or 2007 rulings etc but that was never litigated as the ECj has closed the entire thing.

Many of the other tax/competition cases went in favour of taxpayer on weaker grounds with better explanations.

Marcusm

https://www.boards.ie/discussion/comment/122607594#Comment_122607594

Actually the ECJ just determined that the Commission was entitled to make that finding. The ECJ did not establish the underlying position. And thee flaw in the Commission’s position is that it said the 1991 and 2007 rulings should be interpreted in light of a 2010 OECD paper and did not properly consider the approach applied in Ireland and many other countries in relation to attribution of profits at those times.

The superior courts do not always relitigate entire cases - it’s one of the reasons why there are people on death row in the US whose innocence is established but who cannot be released in that basis - their guilt is absolute unless some procedural error is found, actual innocence is not a basis for an appeal generally.

By comparison, the ECJ decided the lower court (General Court) was flawed but instead of remitting the case to be considered properly it decided that the Commission (acting as inquisitor, prosecutor and tribunal) was entitled to find against Ireland and that its procedures were appropriate such that their decision should stand.

blanch152

https://www.boards.ie/discussion/comment/122607846#Comment_122607846

Furthermore, the ECJ determined that the evidence that the General Court relied on to overturn the Commission judgement was inadmissable because Apple had not presented it to the Commission when the Commission was making its ruling. This makes it stranger that the ECJ didn't refer the case back.

By ruling out the evidence that the General Court relied on to overturn the Commission's ruling, and by not referring it back for a new assessment, the ECJ had little choice but to uphold the original Commission ruling, whether or not it was correct in the first instance. Apple essentially lost the case by not giving the original Commission investigation sufficient evidence which did exist, but was inadmissable at a later stage.

Hotblack Desiato

https://www.boards.ie/discussion/comment/122604687#Comment_122604687

Sounds very brexity. What, precisely, did we "roll over on" i.e. agree to which was not in our national interest?

https://www.boards.ie/discussion/comment/122607681#Comment_122607681

So after being accused of giving state aid to Apple, you expect that Ireland will actually give state aid to Apple. How does that make any sense.

magicbastarder

How would you 'quietly' pay back €13bn anyway? When the entire country is going to be wondering what the money will be used for?

Randycove

https://www.boards.ie/discussion/comment/122606867#Comment_122606867

which is exactly what Ireland did and created the massive 26% jump in GDP.

TokTik

https://www.boards.ie/discussion/comment/122604428#Comment_122604428

Are we not running an €8bn surplus currently??

Podge_irl

https://www.boards.ie/discussion/comment/122608516#Comment_122608516

Yes, but predominantly from corporation tax and reducing our tax base on the basis of such unpredictable receipts would be a very bad idea (and very reminiscent of mistakes made in the past)

plodder

https://www.boards.ie/discussion/comment/122607906#Comment_122607906

Sounds bizarre. What was the point of the general court using evidence that couldn't then be admitted in an appeal?

Does this mean that the case was decided substantially on matters of procedure and the underlying issues aren't resolved? Costly mistake by Apple if so. Or are the EU courts just highly arcane? I find it a bit weird this aspect that the ultimate court of appeal (the ECJ) rarely disagrees with the supposedly independent report from an Advocate General. But, that might be a misunderstanding by the media of how it works.

blanch152

https://www.boards.ie/discussion/comment/122608600#Comment_122608600

It is a long and complicated judgement, that was one aspect, however, it was clear that the ECJ ruled that the evidence that Apple produced at the general court shouldn't have been considered, and therefore we will never know whether the Commission would have ruled differently initially or the ECJ itself would have ruled differently, had that evidence been admitted.

Juran

Now EU, how about pursuing Ireland's car import duty ie. VRT, on secondhand cars coming from EU countries.

After EU free trade and free goods movement agreements, all EU countries were supposed to drop import duties on secondhand cars, they all did, except Ireland who changed the name from import duty to VRT.

Germans can buy 2nd hand cars in Austria, France or Holland and pay only a small registration fees for new plates & paperwork, which is about €50. Same with Spain, Italy, Portugal, Belgium, etc. They can shop around.

When they were part of the EU, the British were able to bring in cars from Ireland or EU (left hand drives used to be available from Dutch dealers near the ferry ports), with zero import duty.

blanch152

https://www.boards.ie/discussion/comment/122608937#Comment_122608937

Even if the EU does something about it, now that the UK has left the EU, the Irish government could just replace it with a tax on left-hand drive cars for health and safety reasons.

Hotblack Desiato

https://www.boards.ie/discussion/comment/122608937#Comment_122608937

That's beloved of barstool bores but, unsurprisingly, totally untrue.

Ireland is not the only EU country with a vehicle registration tax, and whether it's a new or secondhand vehicle is irrelevant. It's not an import duty because if you manufactured a vehicle here, it'd still be liable.

Also I don't want to have to pay more income tax so some rich git can get a cheaper Merc or Porsche, thank you very much.

Seth Brundle

https://www.boards.ie/discussion/comment/122608937#Comment_122608937

It is not a tax on importing a vehicle. It is a tax on registering a vehicle. As you even admit, other countries have such taxes.
Furthermore, would you like to point out the taxes in say Germany that we don't have because I assume you would like those brought in here?

Lastly, this:

When they were part of the EU, the British were able to bring in cars from Ireland or EU

Ireland is the EU. Before Brexit, the UK was the EU, etc.

Hotblack Desiato

I tell you what, there's not many Irish people who haven't lived there who wouldn't be shocked at the level of (compulsory) health insurance and property tax they'd have to pay in Germany. You never hear anything about that though, just the 'chape cars'…

AMKC

https://www.boards.ie/discussion/comment/122607607#Comment_122607607

Oh I agree. A better idea would be only to give it to adults who do not drink, smoke or do drugs. Only give it sensible people but it would be impossible to work out so ye maybe ur should bd used to fix the housing crisis and homelessness.

flatty

https://www.boards.ie/discussion/comment/122608560#Comment_122608560

It's not unpredictable though, we've been making out like bandits for years, and there is absolutely no sign whatsoever of this changing anytime soon.

We should get rid of the "temporary" USC.

downtheroad

https://www.boards.ie/discussion/comment/122610122#Comment_122610122

USC is the best and fairest tax paid in Ireland.

Juran

https://www.boards.ie/discussion/comment/122609301#Comment_122609301

Yes, Ireland is in the EU, and Britain was in the EU ... exactly what I said.

Agree, EU coutries pay a registration fee, I am very familar with it as I paid just under €50 to register an UK import Audi in Germany a number of years ago. The same car would have cost me around €5,000 to register it in Ireland.

Hotblack Desiato

https://www.boards.ie/discussion/comment/122610267#Comment_122610267

Absolutely. I like how it gets at unearned income. If anything we should be increasing USC and cutting income tax correspondingly

Geuze

https://www.boards.ie/discussion/comment/122608516#Comment_122608516

Yes, after massive fiscal deficits during COVID.

SpoonyMcSpoon

https://www.boards.ie/discussion/comment/122610267#Comment_122610267

That is gaslighting; it is not fair at all to levy it on a large portion of the workforce that weren’t even in the workforce when the shenanigans leading to the banking crisis happened. Quite simply, it was introduced to cover the hole in public finances which is no longer there.

The purpose of the tax is no longer there so how the hell can you or anyone claim it is fair? This is the perfect example of how voting for FG is like a hostage starting to sympathise with their kidnapper. The fact this USC still exists shows how the country has just given incompetent and corrupt public servants a free pass when the economy has been absolutely booming for a decade. If the English had Ireland colonised today, there would be no independence movement.

A much more equitable tax would be to remove the capital gains tax exemption for selling the principal private residence given this is where a disgusting amount of money and productivity in this country gets hoovered up into. Especially seeing the out of control nature of house prices once again in the last ten years. By exempting the PPR from CGT if it has appreciated since the people bought it, there is effectively a wealth tax loophole created. At the very least, if not the full CGT rate, a tax of some level should be introduced for capital gains when selling the PPR.

Boggles

https://www.boards.ie/discussion/comment/122610705#Comment_122610705

That makes it more impressive TBF.

Wanderer78

https://www.boards.ie/discussion/comment/122610705#Comment_122610705

…and we should be maintaining a small deficit indefinitely, to try reduce our reliance on credit created money, which is ultimately whats causing our property price inflation, and other asset price inflation, but dont worry, that ll never happen!

Peregrinus

https://www.boards.ie/discussion/comment/122610998#Comment_122610998

Genuine question here: While I've read many claims from critics of the USC that it was introduced as a temporary measure, I've not seen this backed up with any cite showing those in authority saying, at the time they introduced it, that it would be temporary.

Can anybody point to such a cite?

DataDude

https://www.boards.ie/discussion/comment/122610998#Comment_122610998

From a theoretical standpoint, I’d 100% agree with CGT on the PPR. It feels ‘unfair’ to have the single biggest source of wealth accumulation in Ireland taxed at 0 whilst marginal income is at 48 or 52% for most…however…CGT on PPR could have major major impacts on liquidity in the market.

It makes upsizing considerably harder, but crucially it would bring downsizing to a standstill overnight as equity released for older people would be massively reduced and it would be better to wait for death where the CGT bill dies too.

Given that more downsizing is one of, if not the, single most desirable action in our current housing market, I think this should rule out any PPR CGT consideration.

Boggles

https://www.boards.ie/discussion/comment/122611052#Comment_122611052

to try reduce our reliance on credit created money, which is ultimately whats causing our property price inflation

Well no. Numerous variables have caused property price inflation, material, labour costs and demand.

The rules around credit still exit and are quite stringent, it would be far worse out them.

People accumulating large cash deposits throughout Covid also played it's part.

Anyway it is the banks that borrow and lend credit.

If you want to reduce the reliance on this credit, property will have to become cheaper and rules around borrowing will have to become more stringent. How you make property cheaper when demand is high and there is a skills shortage, fúck knows.

Of course there will be various negative knock on effects from this if you managed it.

downtheroad

https://www.boards.ie/discussion/comment/122610998#Comment_122610998

Relax.

I claim it as fair, because it is unavoidable through tax credits and reliefs, unlike income tax which is simple to avoid expecially for the wealthy.

It's also fair as it paid by far more taxpayers, than income tax. Far too many people in Ireland pay zero income tax.

Now there is no USC paid by those earning less than €13,000 per year. Everyone should be paying tax, even the smallest contribution, towards a functioning society and country.

As to your comment regarding people paying USC that had no hand in the financial crash, would you suggest that we all pay tax in direct relation to the public services that we consume? That would be an absolute mess.

You could send your PPR exemption from CGT idea to the Minister for Finance for consideration by the way.

Wanderer78

https://www.boards.ie/discussion/comment/122611293#Comment_122611293

…and wrong, yes stricter credit rules have helped in preventing household credit fueled inflation, so to counteract, we moved towards more institutional credit based debt, investment funds etc, so we re still actually dealing with a credit fueled property bubble, and to add to this, further government demand based policies such as first time buyers etc, which is effectively recirculation of credit based money, has also helped inflate prices…..

…the above policies have been tried else where in world, resulting in the exact same problem, i.e. further price inflation!

credit based money has this inherent fundamental baked into its existence, from creation its hard wired to maximise returns, and under current financialised dynamics and conditions, the fastest way for returns is by simply using this credit to inflate the value of assets such as property

but yes, we now have another element now exasperating inflation, and this is indeed coming from the supply side, i.e. materials, energy, labour etc etc

all in all, the whole thing is mess, and will continue to get messer and messer…..

ways to slow inflation, STOP demand side stimulation policies such as first time buyers, start directing public funds towards supply side stimulation, i.e. try expand capacity…

….but dont worry, none of that is gonna happen, so happy days….

Chris_5339762

https://www.boards.ie/discussion/comment/122609349#Comment_122609349

And the very high Church Tax.

Which is mandatory if you're a catholic. And if you don't pay it you can't legally get married or baptized, or baptize a child.