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A comment on A Tax Expert Takes Tim Cook's EU Letter Apart Point by Point. Parent comment

Re:A Tax Expert Takes Tim Cook's EU Letter Apart Point by Point by Wilya on Thursday September 01, 2016 @08:43AM (#12404793)
Apple considers that all sales across Europe actually happen in Ireland, so taxes on profit on sales in the whole EU are paid in Ireland. That part is perfectly legal within the EU.

The issue is that the normal tax rate in Ireland is around 12%, and Apple uses accounting tricks and tax exceptions to lower their effective tax rate there to 0.005%. That is the part that the the European Commission ruled illegal.

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Re:A Tax Expert Takes Tim Cook's EU Letter Apart Point by Point by pjc50 on Thursday September 01, 2016 @09:35AM (#12405096)
Effectively they argue that, in EU countries and India and Africa, the profit happens in Ireland. This is done through transfer pricing.

In Ireland, they argue that the profits happen at a "head office" which was not based in any country and did not have any employees or own premises.

(The ruling: http://ec.europa.eu/competition/state_aid/cases/253200/25320... linked from http://ec.europa.eu/competition/elojade/isef/case_details.cf...) - search for "AOI"

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