Jack Lew Furious After Europe Set To Hit Apple With "Largest Tax Penalty Ever"

Tyler Durden's picture

Just minutes after the excitement over Apple's new product announcement hit, The FT drops a rather more painful headline stating that Apple will on Tuesday be hit with Europe’s largest tax penalty after Brussels ruled that the company received illegal state aid from Ireland. Despite Treasury Secretary Lew's pleas/demands just a week ago that the EU back off, the company will have to pay billions of euro in back taxes to Dublin as the European Commission moves to redraw the boundaries on aggressive tax avoidance by the world’s biggest corporations.

A week ago, Jack Lew implored Europe to reconsider...

After a meeting with U.S. Treasury Secretary Jack Lew last month, the European Union’s antitrust chief Margrethe Vestager tweeted a photo of herself standing awkwardly next to the American finance chief, with the two of them facing in slightly different directions.

 

 

It was a “very good meeting,” she tweeted. But the photo was fitting, for the two were far from seeing eye-to-eye over the EU’s investigations into the sweetheart tax deals some multinational companies have sealed with various European governments.

 

The trans-Atlantic discord could deepen this fall when the European Commission, which holds the bloc’s antitrust authority, is expected to decide on some of its biggest cases, including one involving Apple Inc. The commission could require the companies to pay back large sums in unpaid taxes.

But it appears Washington's might has been overlooked as The FT reports that Vestager circulated the final ruling to her counterparts in the EU’s executive branch only on Monday morning, deploying a fast-track procedure in a bid to minimise leaks. The usual notice period is two weeks.

A 130-page judgment by the commission follows a three-year investigation into claims that two advance tax opinions issued by Dublin violated EU law by granting Apple an advantage not available to other companies.

 

The decision is set to be the subject of appeals in the European courts by Apple and Ireland, both of which have denied any wrongdoing.

 

The commission’s ruling calls on Dublin to raise a new tax assessment on Apple, which previously warned the US Securities and Exchange Commission that an adverse decision by Brussels could have a “material” impact on its finances.

 

One person familiar with the inquiry said Apple will have to restate its accounts as a result of the ruling. Investigators have examined how Apple paid a tax rate of less than 1 per cent on European sales — far lower than Ireland’s headline 12.5 per cent tax rate on business profits.

 

The commission is concentrating on the tax treatment of Apple’s intellectual property assets, a hotly disputed area likely to lead to a large claim for back taxes.

 

Although the decision itself does not specify the precise amount of money in play, Ms Vestager will set out an estimate when the findings are released on Tuesday, according to people briefed on her plans. Several people briefed on the findings in Brussels and Dublin believe the liability will run to billions of euros.

The Starbucks and Fiat rulings are under court appeal, and investigations continue into Amazon’s arrangements.

Clearly, the ruling marks a setback for the Irish government, which has moved in recent years to unwind the most contentious elements of a corporate tax regime that has long irritated other EU member states.

“The government‘s case is very robust,” said Ireland’s finance ministry. “The minister has indicated previously that any adverse ruling should be appealed in the European courts and will recommend that course to cabinet.”

How long before we hear calls for IreLeave?

And how long before more European banks face fines for various money-laundering charges or mal-treatment of investors? The 'tit' for this 'tat' - just as American hegemony is being called into question globally - will likely be large.

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Chippewa Partners's picture

That should get him on the Board of Directors pronto!

mtl4's picture

Time for Apple to share in the EU's austerity plan for better jobs in Brussels.

insanelysane's picture

EU is awesome.  The UK is making a mistake by leaving.  Yaah right.

HowdyDoody's picture

Call Soros so he can unleash more of his migrant hordes.

Haus-Targaryen's picture

Interesting, how the Commission drafts the laws, enforces the laws and acts as judge and jury.  

Congratulations Europe, you've brought back the Soviet Union.  

Dame Ednas Possum's picture

A clear statement of European sentiment towards TTIP rape.

Btw... which passport was Jacob travelling on?

CuttingEdge's picture

Fuck Apple.

$100 Billion offshored they do't what to pay US taxes on? Fuck Lew too for being such a cunt in defending them.

DownWithYogaPants's picture

Always makes me feel like I have to piss when I read the name "Lew"

.....I have to go to the lew.

Here2Go's picture

"Always makes me feel like I have to piss"

 

He seems 'PISSED OFF'

 

He should be 'PISSED ON' instead...

Automatic Choke's picture

couldn't happen to a nicer fruit.

 

ufos8mycow's picture

Is he standing on a box? He seems so tiny compared to her in the picture. Or she's a giant. I can't stop looking at it.

 

Her head is like 2.3 times as big as his and his waist is on the same level as the bottom of her breasts...weird.

RU4Au's picture

I wonder how much Jack Lew complained when The USA.GOV fined UBS $9 B, trying the case in the US  ?  Maybe that's the problem... Apple needs to be tried in the US for their crimes/tax evasion in Europe. That should satisfy Jack.

archon's picture

Globalist pricks all want the same thing... If only there were one world government, then there would be no place for corporates to hide.

new game's picture

has fascism moved up a notch to include the courts of the eu? lol, because either the eu union is desparate for cash, lol again, or apple didn't pay the right bloody club members. does this mean apple isn't in the club? homophobic? lol ing again...reeks of dicrimination and hate crimes against a club member, lol...

Citizen_x's picture

Jacob Lew Treasury Secretary

Defending AAPL....? ?

I thought he worked for
the Tax Payers of the USA ? ?

GreatUncle's picture

TTIP european rape but Obamas weapon to shut down trade links with China and Russia and bring them to heel.

Like Obamacare, the european people are not allowed to even see it until it is passed because it is an appointed commission and pay to play in use.

tonyw's picture

"Interesting, how the Commission drafts the laws, enforces the laws and acts as judge and jury.  "

Sounds almost the same to me as the ruling that French bank BNP was guilty of money laundering so should pay USD 9billion in fines - FWIW no French laws were broken but US hegemony you know.

GreatUncle's picture

And if trapped in such a system millions of people can't protest and change it.

The UK voting system is shit but it is better than a worthless vote for a president (electoral college rules) or poxy MEP's (the nodding dogs used to pretend you have a say in Europe).

One day if the EU does not fall it will become malevolent.

Power corrupts go ask Clinton and absolute power corrupts absolutely.

More Ammo's picture

That pic definitely looks photo shopped together to me or else he is one little bastard.

indygo55's picture

The photo is a fake. They were not even in the same room. Look at the size of her head compared to his. It's not even a good fake. Jeeze!!

Pinto Currency's picture

Jack Lew cares.

LOL.

Katos's picture

Apple executives are appalled after they paid millions in bribery dollars to US elected officials to cover their ass???? in these situations?

knukles's picture

Yes he does.  But why it's about Apple's tax bill in Europe is beyond the pale.
This guy should be worried about debt ceilings (what a quaint thought) hard v fiat money, decreasing the debt load and simplification of the tax code and regulatory burdens so the economy can expand thereby generating more .... but Oh No.

Definitely going on Apple's board.

 

Kirk2NCC1701's picture

Jack Lew does care: about his fellow Tribesmen.

Who've invested in and bet on Apple.

steelhead23's picture

Perhaps we have it all wrong.  Perhaps our illustrious Sec. Treas. didn't go to praise Apple, but to bury it.  Could it possible be he simply wanted the inside scoop so he could tell his friends on the Hill how to invest?  Insider trading is legal for them y'know.

birddog27's picture

Question is why? Why does he care if Apple has to spend a little of the cash in their reserves?

Chuckster's picture

They have bills to pay.  Supporting all those new dependants has a price.

Ghost of PartysOver's picture

An Empire in decline shall receive no respect

chistletoe's picture

This is revenge for the US treasury fining a french bank $9B for doing legal business with Iran and Cuba.

the masters of the universe are losing friends everywhere ....

Sizzurp's picture

Jack's like, "hey you can't shake down our companies, only we can do that".

Lumberjack's picture

Dear Europe, there's a company name GE and.....

 

 

 

 

pitz's picture

Apple basically has a bullseye painted on their back with having such a large treasury allegedly in 'cash', rather than paying taxes and paying it to their shareholders.  Or re-investing in productive activities. 

Barnaby's picture

Fuck 'em all. Just switch off the goddamned Fruit, they'll abate that tax faster than you can say Jacques Lefitte.

Doom Porn Star's picture

I didn't know Panama was in Ireland!

Question: does the ( deferred and now due ) tax money go to Ireland or to the EU ?

Being forced to repatriate and pay taxes in the US is next.  

I have a feeling that the fact that Central Banks are printing money out of thin air to buy ( Apple ) stock has something to do with this.  

-Buy it with honest earnings or get fucked?

 

Further: this means that Apple has been under-taxed by 11% for many years.

9 years of 11% =99%.  IF Apple is forced to pay 9 years worth of back taxes -even without any penalty- then 99% of one entire year of profits over the 9-year period must be disgorged!!!

This also means that Apple will be paying at least 11% more on all EU sales going forward.

WIth this in mind I would consider Apple a juicy short to the tune of 10% to 15% -or more.

At roughly $100/share that would mean a 10% aka $10 to 15% aka $15 or more per share possible short!!!

 

Check out the chart of Apple's share price over the last several years:

http://www.nasdaq.com/symbol/aapl/interactive-chart?timeframe=1y

 

Then there is the forex issue...  Euro higher or lower than when the taxes could have been paid??

Nightmare.  Short this bitch.

GreatUncle's picture

You would be going against the bankers who know created all the money to inflate this.

To deflate it now and make the short would be for the bankers to lose a whole load of value ... not going to happen.

Up,up and up because down means you must question if debts are viable.

They are fine look at the value we have.

WillyGroper's picture

pic doesn't look real.

photoshop job.

ParkAveFlasher's picture

I see an Alpine neanderthal standing next to an evil hobbit, yeah everything is as expected.

RopeADope's picture

Margrethe wants to show that Jack has the smaller brain?

Mr. President's picture
Mr. President (not verified) WillyGroper Aug 29, 2016 2:42 PM

Yea..suttin ain't right. .either she has a giant head, or he had a tiny head....whichever it is, they both look creepy. 

 

 

LadiesLoveCoolJames's picture

A few billion less for the sock drawer. And this matters why? Most profitable company in a century and they still look for every fucking angle to save a dollar. Fuck em' with Jony Ive's bald head!

Peacefulwarrior's picture

Vestager would kick Jack Lew's Ass in a fight...

Sizzurp's picture

It's Ok, Trump will make them pay for their defense.

crazybobo1's picture

That lady has the biggest head I have ever seen.

Fox-Scully's picture

I think it is a man's head that has been photoshopped.