Blog Coverage Apple Ire Taxed For 14.5 Billion Dollars

LONDON, UK / ACCESSWIRE / August 31, 2016 / Active Wall St. blog coverage looks at the headline from Apple Inc. (NASDAQ: AAPL). On August 30, 2016, The European Commission ordered the Irish government to recover a record 13 billion Euros ($14.5 billion) plus interest from Apple Inc. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

Today, AWS is promoting its blog coverage on AAPL; touching on stocks like Fiat Chrysler Automobiles N.V. (NYSE: FCAU), Starbucks Corp. (NASDAQ: SBUX), and McDonald’s Corp. (NYSE: MCD). Get all of our free blog coverage and more by clicking on the link below:

http://www.activewallst.com/registration-3/?symbol=AAPL

http://www.activewallst.com/registration-3/?symbol=SBUX

The executive arm of the European Union stated that Ireland granted undue tax advantage to the iPhone maker, allowing it to pay an effective corporate tax rate of 1% on its European profits in 2003 down to 0.005% in 2014. Ireland and Apple both disagreed with the decision and would appeal against it.

“Member states cannot give tax benefits to selected companies – this is illegal under EU state aid rules,” said Commissioner Margrethe Vestager, “The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years.”

The Tax Arrangement

Apple incorporated subsidiaries in Ireland, but the company has stated that they are not tax-resident in the country. About 90% of its foreign profits are sent to Ireland and then channelled to its subsidiaries which have no tax residence.

Source: European Union

Vestager said that Apple was allowed to allocate almost all sales profits to a head office that “only existed on paper”. This head office “has no employees, it has no premises, and it has no real activities,” she also stated,”The head office was subject to no tax in Ireland or elsewhere.”

Apple first relocated its overseas operations to Ireland in 1980, and signed up an arrangement with the Irish authorities in 1991, until 2007, allowing the company to pay a much lower corporate tax rate in some years; as low as 2%. The tax rate under the deal was far less than the country’s standard corporate tax rate of 12.5%, already the lowest in the EU, and substantially lower than the 35% tax rate in the U.S.

Low income taxes are the cornerstone of Irish economic policy, drawing a number of foreign companies looking to lower their tax bill. According to the American Chamber of Commerce in Ireland, more than 700 U.S. companies have units there, employing 140,000 people.

The Tax Precedent

The Apple case may set a precedent on tax collections, amid a recent crackdown from European Commission on a number of companies to investigate “state aid” provisions. In October 2015, the Commission ordered Luxembourg and the Netherlands to recover €20million to €30 million in unpaid tax from Fiat Chrysler Automobiles N.V. and Starbucks Corp., respectively, in order to remove the unfair competitive advantage they have enjoyed and to restore equal treatment with other companies in similar situations. In December 2015, the commission opened investigations into Luxembourg’s tax agreements with McDonald’s Corp. In January, 2016, the commission ordered Belgium to recover approximately 700 million euros from 35 large companies.

‘Profound and harmful effect’

Apple said the decision would be harmful for jobs.

“The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process,” the company said in a statement, “The Commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money. It will have a profound and harmful effect on investment and job creation in Europe.”

The Irish government held a similar view.

“I disagree profoundly with the Commission,” said Ireland’s finance minister, Michael Noonan, in a statement, “The decision leaves me with no choice but to seek cabinet approval to appeal. This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state aid rules into the sovereign member state competence of taxation.”

The U.S. Treasury Department, which has pushed back hard against the EU state-aid probes, said the commission’s actions “could threaten to undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the U.S. and the EU.”

Enough in Bank

Although the amount demanded is the highest ever in a state-aid case, it is unlikely to be a major issue for Apple, the world’s richest. As of last month, Apple had $232 billion of cash and marketable securities, with about $214 billion of that being held overseas. The expected appeal and the subsequent final decision at the EU courts may be a process, with the final amount Apple required to pay would not be finalized until then. The money can be held in escrow pending a ruling.

Stock Performance

Apple’s stock is down 0.77%, finishing yesterday’s trading session at $106.00 on a total volume of 24.81 million shares traded. Shares of the company have gained 8.24% in the last 3 months and 6.42% in the previous 6 months. Additionally, since the start of the year, Apple’s stock has advanced 2.42%. The company’s shares are trading at a PE ratio of 12.38.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the “Author”) and is fact checked and reviewed by a third party research service company (the “Reviewer”) represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the “Sponsor”), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you’re a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com

Phone number: 1-858-257-3144

Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street

ReleaseID: 444556