Apple Could Owe More Than $8 Billion in European Tax Probe

Apple could owe more than $8 billion in back taxes if the European Commission finds issue with the iPhone maker’s corporate tax policies in Ireland, according to analysis by Bloomberg Intelligence.

Apple is one of several multinational corporations that have been scrutinized for corporate tax avoidance in Europe over the past few years. The European Commission began Apple’s tax probe in June 2014, and formally accused the iPhone maker of receiving illegal state aid from Ireland three months later.

The company’s $64.1 billion in profit generated from 2004 to 2012 could be subject to a 12.5% tax rate, compared to its current foreign tax rate of about 1.8%, depending on the outcome of the investigation. A decision in the probe is expected in Brussels by March, possibly after the 2016 Irish election.

Apple’s tax breakdown in Ireland (Image: Bloomberg Intelligence)

Apple operates multiple subsidiary companies in Ireland to pay significantly less tax outside the U.S., where it earns about 55% of its revenue. Apple continues to deny any wrongdoing, and both the company and Ireland vow to take the European Commission to court over any negative verdict.

Last month, Apple agreed to pay 318 million euros in Italy to settle an investigation that accused the company of booking profits generated in Italy through an Irish subsidiary, in an effort to lower its taxable income base and save 879 million euros between 2008 and 2013. Italian regulators concluded that tax probe in March.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Tags: corporate tax, European Commission, Ireland
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Tim Cook Calls Apple’s Tax Avoidance Accusations ‘Total Political Crap’

60 Minutes has shared a preview of Tim Cook’s latest interview with journalist Charlie Rose, in which the Apple CEO emphatically counters the idea that Apple has created elaborate schemes to pay little or no U.S. corporate taxes on its overseas revenue.

Cook described the tax avoidance accusations as „total political crap,“ and deflected blame on the U.S. tax code for being far outdated. He added that repatriating the money in the U.S. is not „a reasonable thing to do“ due to high corporate tax rates.

Rose: You also have more money overseas probably than any other American company. […] Why don’t you bring that home?

Cook: “It would cost me 40% to bring it home, and I don’t think that’s a reasonable thing to do. This is a tax code that was made for the industrial age, not the digital age. It’s backwards. It’s awful for America. It should have been fixed many years ago. It’s past time to get it done.”

Rose: Here’s what they concluded: “Apple is engaged in a sophisticated scheme to pay little or no corporate taxes on $74 billion in revenue held overseas.”

Cook: “That is total political crap. There is no truth behind it. Apple pays every tax dollar we owe.“

Apple’s tax policies have been closely investigated over the past few years in Europe. Earlier this year, for example, Italian regulators accused Apple of booking profits generated in the country through an Irish subsidiary in an effort to lower its taxable income base and save nearly 900 million euros from 2008 through 2013. The investigation was completed in March 2015.

The European Commission began an investigation of Apple’s tax policies in June 2014, and the Brussels-based executive body formally accused the company of receiving illegal state aid from Ireland in September 2014. The commission has since requested more information from Apple, likely delaying a decision in the tax probe until at least after the Irish elections in early 2016.

Apple is said to utilize multiple foreign subsidiaries in Ireland to move around overseas money, which Cook says accounts for two-thirds of Apple’s revenue, without being subject to high corporate tax rates in the U.S. and elsewhere. Apple has consistently denied any wrongdoing, and Ireland vows to take the European Commission to court over any negative ruling.

Cook’s wide-ranging interview will also touch upon encryption technology and manufacturing products in China. In the same episode, Rose will also offer a rare inside look at Jony Ive’s „secret design studio“ at Apple’s headquarters in Cupertino, California. 60 Minutes airs on CBS this Sunday, December 20 at 7:30 p.m. Eastern Time and 7 p.m. Pacific Time.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Tags: Tim Cook, CBS, corporate tax, Charlie Rose, 60 Minutes
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Verizon’s Wi-Fi Calling Coming to Galaxy S6 on Monday, iPhone ‘Early Next Year’

Verizon yesterday announced that it will begin rolling out support for Wi-Fi Calling next week, starting on Monday with Samsung’s Galaxy S6 and S6 Edge. iPhone users will need to wait a bit longer, with an update enabling the feature expected „early next year.“

Wi-Fi Calling will initially be available on the Samsung Galaxy S 6 and Samsung Galaxy S 6 Edge and will be rolled out as a software update in phases. Additional Android and iOS devices will receive Wi-Fi Calling capabilities via future software updates expected early next year.

Wi-Fi Calling allows phone calls to be automatically placed over Wi-Fi connections in areas where cellular service is poor, seamlessly transitioning between cellular and Wi-Fi as needed.

Sprint and T-Mobile have supported the feature for some time, and AT&T launched its support in early October. AT&T made waves by claiming Sprint and T-Mobile have been offering the feature illegally, due to Federal Communications Commission requirements for supporting a teletypewriter (TTY) feature for deaf and hard-of-hearing users.

AT&T received its waiver from the FCC just days later, and Verizon followed with its own request, with the FCC approving it several weeks ago. Sprint and T-Mobile have not received waivers from the FCC, but continue to operate Wi-Fi Calling and believe no waiver is required.

Tags: Verizon, Wi-Fi calling
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Google breaks promise to not collect student data

Google has been accused of breaking its student privacy pledge by collecting data and browsing habits from Chromebooks used in schools and Google Apps for Education. The Electronic Frontier Foundation (EFF) has called upon the Fair Trade Commission (FTC) to investigate Google’s conduct, and to prevent it from using the data it has collected so far. “Despite publicly […]

(via Cult of Mac – Tech and culture through an Apple lens)


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AT&T increases unlimited data cap to 22GB

AT&T has announced that it is increasing its data cap to 22GB for customers who are still grandfathered into unlimited data plans. This is more than four times the 5GB cap previously offered to LTE subscribers, and more than seven times the 3GB cap offered to 3G subscribers. This move means that if you have […]

(via Cult of Mac – Tech and culture through an Apple lens)


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Apple Planning Revamped iPad Keyboard, New Metal Finishes for Apple Watch

Accompanying the iPhone 6s and iPhone 6s Plus, iPad Pro and next-generation Apple TV set to be announced next week, Apple is also planning a revamped iPad keyboard and new metal finishes for the Apple Watch Sport, including a less expensive gold version, according to The New York Times.

9to5Mac reported similar information, claiming the iPad Pro will have expanded Bluetooth keyboard support and that Apple is working on a new keyboard accessory for the rumored 12.9-inch tablet, which could be released by year end. The report also hinted at the possibility of new gold Apple Watch Sport colors.

Last month, a new Apple Wireless Keyboard with Bluetooth 4.2 and a rechargeable lithium-on battery was discovered in filings with the U.S. Federal Communications Commission. Images of an Apple Wireless Keyboard with backlit keys and a power button also briefly surfaced on the Apple Online Store in March.

MacRumors has also received information about Apple’s plans to release at least one new metal finish for the Apple Watch. KGI Securities analyst Ming-Chi Kuo first noted the Apple Watch may gain additional casing options in March, and three months later said a yellow and rose gold Apple Watch Sport will launch in the fall.

Apple Watch Sport spray painted gold by Casey Neistat on YouTube
Apple is also expected to debut new Apple Watch Sport bands at its September 9th media event, possibly with a focus on darker colors.

MacRumors will be providing live blog coverage of Apple’s „Hey Siri“ media event, which begins next Wednesday at 10:00 AM Pacific.



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Tim Cook and Eddy Cue Receive Combined $94 Million in Apple Stock

Apple CEO Tim Cook and Senior Vice President Eddy Cue received 560,000 and 350,000 restricted stock units respectively this week, worth a combined $93.8 million based on AAPL’s closing price of $103.12 on Monday, according to a pair of filings with the U.S. Securities and Exchange Commission.

Tim Cook and Eddy Cue at an Apple Store in 2014 (Image: Bloomberg)
Cook was awarded with 280,000 performance-based restricted stock units in full based on Apple’s performance relative to the other companies in the S&P 500 over a two-year period ending August 24. Apple needed to achieve a total shareholder return (TSR) of at least 41.36% to place in the top third of companies in the index, and Apple’s TSR for the two-year period was 76.76%.

Cook and Cue did not sell any of their RSUs, although 290,836 and 171,853 shares were withheld by Apple respectively to satisfy the minimum statutory tax withholding requirements on vesting of RSUs. Cue transferred his remaining 178,147 shares that vested to a family trust, and he has now been awarded all 700,000 shares granted to him on September 2, 2011.

Cook has a remaining 4.76 million RSUs scheduled to vest as follows per the SEC filing:

700,000 RSUs on August 24, 2016; 700,000 RSUs on August 24, 2021; 1,680,000 vest in six equal annual installments commencing August 24, 2016; the remaining 1,680,000 are all subject to performance based vesting requirements and will potentially vest in six annual installments commencing August 24, 2016.

Cook must remain employed at Apple to receive his unvested RSUs on their applicable vesting dates.



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EU Inquiry Finds No Evidence Apple Colluded With Record Labels to End Freemium Music

The European Commission has failed to find evidence that Apple conspired with record labels to put a stop to free music streaming services, reports Re/code, citing sources with knowledge of the investigation.

The European Commission spoke with multiple digital music services and record labels, but was not able to find evidence of illegal activity, putting an end to the probe. Investigators’ „files will remain open,“ however, as Spotify continues with licensing talks with major labels.

European regulators began scrutinizing Apple’s discussions with record labels in April, over concerns Apple would use its influence to persuade music companies to put an end to free ad-supported music services such as Spotify. Apple Music, unlike Spotify, does not offer a free listening tier.

Rumors later suggested Apple was indeed leveraging its power in the music industry to push record labels to stop offering licensing options for freemium music tiers, leading to investigations by the U.S. Department of Justice and the Federal Trade Commission, both of which are ongoing.

According to Re/code‘s sources, while the European Commission has found no evidence of collusion between Apple and record labels, it has also launched a separate investigation into Apple’s App Store policies concerning competing music services.

Separately, the EU has asked Spotify and other music streaming services for information pertaining to Apple’s mobile App Store, according to people with knowledge of the situation. Regulators are seeking information on the restrictions Apple places on apps offered through the store.

Apple’s App Store policies are also currently being looked at by the U.S. Federal Trade Commission, due to the 30 percent fee the company collects on app and subscription revenue. The FTC is concerned that Apple’s fee and its policies, such as a ban on links to outside stores, are illegal under antitrust law.



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Apple spends $700k per year keeping Tim Cook safe

Tim Cook might be a guy who can take care of himself, judging from the impressive amount of time he spends in the gym each day, but Apple’s not taking any chances. According to the company’s “Schedule 14A” recently filed with the U.S. Securities and Exchange Commission, Apple shells out close to $700,000 each year on […]

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