The European Commission imposed a fine to Apple?
No. Brussels is aimed at member countries, which bans – under the regulations on state aid – to offer favorable tax conditions for some companies, which would distort competition. In the proceedings on the Apple tax treatment, therefore, we are screened agreements that the company has signed with the Irish tax authorities (in 1991, then revised in 2007). After the investigation, the Commission concluded that it is illegal fiscal aid that allowed Apple to see themselves better treatment of other companies.
Why agreements were irregular?
because it considerably, but contrived, lowered taxes owed by Apple to Ireland. In “tax ruling” (ie agreements between the company and the tax authorities which are in themselves legal), Ireland has effectively cleared through customs, the Apple tax planning scheme, based on the two subsidiaries in Ireland Apple Sales International and Apple Operations Europe, which however, he did not correspond to the economic reality of the group. The Commission insists on the discrepancy between their fiscal architecture of the group and its justification “factual” or “economic”. In a nutshell, the profits were not recorded when they produced, under Irish tax regime no longer in force. In the end, the tax rate on Apple fell 1% in 2003 to 0.005% in 2014. On average, the Irish tax rate is 12.5%.
How did it work Apple’s tax structure in Europe?
the Commission considers that the treatment popped in Ireland has allowed Apple to avoid taxation on almost all the profits from the sale of Apple products in the single European market. Apple Sales International and Apple Operations Europe are two Irish companies owned 100% by the Apple group, headed by the American Apple Inc. They have the rights to use the intellectual property of Apple and for sale the products of Apple outside the Americas, with a “cost-sharing” agreement with Apple Inc. Apple Sales International and Apple Operations Europe pay every year to the US companies an amount to cover the costs of research and development undertaken for the benefit of society Irish. These charges, especially against Apple Sales International, are deducted from the profits recorded each year in Ireland. The tax on the remaining profits is based on the ruling of the ’91 and 2007, which remained in force until the restructuring of the corporate structure of 2015. Apple Sales International is the company that sells the products formally outside America: the proceeds from a shop in Rome or Berlin, they go to her. But these profits, thanks to the agreements, were allocated to the Head fictitious office and only minimally remained the Irish subsidiary. Thus, only a small percentage was taxed in Ireland and the rest escaped. In 2011, for example, Apple Sales International has recorded 16 billion in profits, but only 50 million were considered taxable in Ireland. That year, paid in Dublin taxes were limited to 10 million (source: US Senate). Apple Operations Europe also responsible for the implementation of some computer lines, had a similar pattern.
What is required to Ireland?
EU rules on State aid State requires that – where it registers unlawful aid – is recovered to “remove the distosione created the competition.” No fines or penalties of interested companies, “but simply re-establishes fair treatment compared to other companies”, detailing Brussels. To calculate how much Ireland has to recover, the committee moved the profits allocated to the “head office” of Apple Sales International and Apple Operations Europe to Irish subsidiaries, applying the tax on viable businesses normally on this amount. The request may be retroactive up to 10 years from the beginning of the investigation: the first request for information had arrived in 2013, and Brussels asks Ireland to recover what has not been collected since 2003. Of the 13 billion, only 50 million relate to Apple Operations Europe and the rest of Apple Sales International. This period ends in 2014, since the year after it changed the structure of the group and the tax ruling in 2007 has fallen. The overall figure will be reduced if other countries require it to pay more taxes on profits earned by Apple Sales International and Apple Operations Europe in the period considered: it may do if, based on the information that emerged from the survey carried out by the Commission itself, they considered that the risks commercial, sales and other Apple activities have taken place in their jurisdictions,. In the light of the action already announced by Ireland, the state should still pursue recovery and to leave the amounts deposited pending the decision of the EU court.
Are there other similar cases?
the Commission has raised the level of attention on the tax ruling from June 2013. in October of 2015 concluded that Luxembourg and Ireland have provided selective advantages to Fiat Finance and Trade (subsidiary of Fca) and Starbucks and has therefore asked the Authority to recover 20-30 million by the companies taxes. Last January, found that Belgium has treated favorably at least 35 mainly European multinationals, violating again the rules on state aid. Other surveys Luxembourg are going with regard to relationships with Amazon and McDonald’s. In October 2015 it was reached political agreement because the European states to exchange information on tax arrangements.
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