European Union Stories September 5, 2018
European Union Stories March 14, 2018
The French government is taking both Apple and Google to court, accusing the companies of ‘abusive trade practices’ in the way that they treat developers.
Reporting on the case is light on detail, but France appears to have three objections to the way the relationship works between app stores and developers …
European Union Stories March 16, 2016
Called before the European Parliament’s tax committee yesterday to explain its tax arrangements, Apple’s VP of European operations denied that the company received illegal state aid, reports Bloomberg.
“We feel that we’ve paid every cent of tax that is due in Ireland,” Cathy Kearney said at the European Parliament in Brussels. “We don’t feel that there has been state aid involved and I suppose we look forward to that outcome happening at the end of the day and being vindicated in that way. I would say that the Irish government also agrees with that view.”
Kearney also denied suggestions that the special tax deal with the Irish company was the reason it had chosen the country as its European HQ …
European Union Stories March 15, 2016
Pressure on Apple over European tax affairs ramps up as European Parliament seeks explanations
With a long-running investigation into the legality of Apple’s tax arrangements in Europe not expected to end any time soon, the company will come under additional pressure tomorrow when it is called before the European Parliament’s tax committee.
European Union Stories March 9, 2016
The European Union warned us this week not to expect a speedy conclusion to the long-running investigation into the legality of Apple’s tax arrangements in Europe. The delay follows a decision back in December to expand the scope of the investigation.
But while the wheels of EU tax investigations may grind exceedingly slowly, I’d be willing to wager quite large sums of money on the final outcome. It looks to me increasingly clear that Apple’s tax arrangements with the Irish government are going to be declared illegal, and that Apple is going to be faced with a significant bill for unpaid tax …
European Union Stories March 7, 2016
EU competition chief warns “don’t hold your breath” on $8B investigation into Apple’s tax affairs
European Union competition chief Margrethe Vestager has warned reporters not to expect a quick decision from the investigation into whether or not Apple’s tax arrangements in Europe are legal, reports Bloomberg.
“Don’t hold your breath,” she told reporters in Brussels on Monday about the timing of decisions targeting Apple and online shopping giant Amazon.com Inc, whose tax affairs in Luxembourg are also under intense scrutiny. “I’m just warning you.”
Apple uses Ireland as its European headquarters, funneling most revenue through the country, where it has a special arrangement with the Irish government to pay corporation tax of just 2.5%. The EU believes this arrangement may be illegal for two reasons …
European Union Stories January 15, 2016
With a recent European Commission ruling making it look more likely than ever that Apple’s tax arrangements in Ireland will be declared illegal, Bloomberg has been doing the sums on how much the company may owe in back tax. The total? More than $8 billion.
Apple funnels all its European revenue through Ireland, where a special agreement with the Irish government means that it pays just 2.5% tax instead of the normal 12.5%. A long-running European Commission investigation into the legality of this arrangement was recently extended and expanded its scope.
Assuming the agreement is ruled to be illegal, it would be the Irish government – and not Apple – who broke the law, but Apple would still have to pay the difference between the tax it actually paid and the full amount that would have been due without the deal. The company warned shareholders last year that it may have to pay ‘material’ back taxes, but the figure calculated by Bloomberg is much larger than earlier estimates …
European Union Stories January 11, 2016
Belgian ruling increases likelihood that AAPL’s sweetheart tax deal in Ireland will be ruled illegal
The European Commission has ruled that tax breaks offered by Belgium to multinational companies are illegal, and that the companies concerned must pay the full rate of tax due in the country, reports VentureBeat. This follows similar decisions in Luxembourg and the Netherlands.
While none of these rulings directly impact Apple, they do make it look extremely likely that the Commission will reach the same decision in Ireland, where Apple pays just 2.5% corporation tax instead of the normal 12.5%.
The Irish government offered Apple the special deal in order to encourage the company to choose the country as its European headquarters. The European Commission has been running a lengthy investigation into the legality of this arrangement, and has recently extended and expanded its scope.
If Ireland is indeed found to have broken the law, Apple will have to pay the difference in tax for up to ten years. The total amount was estimated last year at $2.5 billion. Apple warned shareholders at the time that it may face ‘material’ back taxes should the decision go against it.
The EC isn’t the only entity unhappy with Apple’s tax arrangements in Ireland either. The Italian government accused Apple of failing to declare more than $1.3 billion of corporation tax in the country as a result of funneling profits through to Ireland. Apple, which has 16 retail stores in the country, recently agreed to pay the full €318M ($347M) claimed by the Italian tax office.
Photo: AP Photo/Rick Rycroft
European Union Stories December 14, 2015
The long-running investigation into the legality of Apple’s tax arrangements in Ireland has been expanded, with the European Commission now seeking additional information from the Irish government, reports the FT. This means that the investigation is likely to be extended well into next year. A ruling had originally been expected before the end of the year.
While Irish authorities had expected the case to be concluded soon, they have instead been sent bulky sets of supplementary questions, meaning it will be difficult to reach a final verdict until after the 2016 election, which is expected as early as February […]
The Irish finance ministry confirmed that the government was supplying the requested additional information to the commission. “We do not expect any decision until after the new year,” said a spokesman.
If the ruling goes against Apple, it could face a bill for billions of Euros in underpaid tax …
European Union Stories November 11, 2015
Update: Apple has since stated that Cook intended to describe the Microsoft Surface Book as “diluted” rather than “deluded.”
The Irish government has announced that Apple will be employing an additional 1,000 staff in Ireland, the country where the company declares much of its revenue from sales throughout Europe, reports Reuters.
Ireland’s main foreign investment agency, the IDA, said Apple was to add 1,000 jobs to its office in Cork by mid-2017 from 5,000 at present. It said the company had also added 1,000 jobs in the past year.
There had been some concern about whether Apple would maintain a significant presence in the country if the European Commission investigation into Apple’s tax dealings in the country went against the company … expand full story
European Union Stories August 7, 2015
The European Union’s inquiry into whether Apple had colluded with music labels to suppress competition from streaming music services like Spotify has concluded that no evidence exists to support such claims.
The investigation involved the questioning of executives from several of Apple’s partner labels to determine whether App Store limitations might “lock out” competitors.
European Union Stories July 15, 2015
A European trademark holder has filed a lawsuit against Apple over the name ‘iWatch‘, despite the fact that the company’s own product was ultimately named Apple Watch. The issue it seems is paid promotion on Google search ads when the term “iWatch” is searched. Since Apple’s smartwatch was long rumored to be called the iWatch, and many regulars (including Tim Cook) still refer to it as such, Cupertino figured people would search for ‘iWatch’ when looking for its new device and took out some Google ads for the keyword to take advantage. Search for ‘iWatch’ yourself and you’ll almost certainly see a link to Apple Watch as the top result… expand full story
European Union Stories June 30, 2015
Europe finally agrees to abolish roaming charges – but not until 2017
Europe is an odd place to live. In some respects, it acts like one big country (you can drive across it without ever seeing a border or showing a passport), while in other ways it is very definitely individual countries – like paying roaming charges outside your own country for calls, text messages and data.
We’ve been promised an end to roaming charges for what feels like forever, and the good news is that after years of discussion and debate, the European Union finally agreed to a date. The bad news is that the date isn’t until June 15th 2017.
It means that from 15 June 2017 you can use your mobile device when travelling in the EU paying the same prices as at home (domestic prices). For instance, if you pay for a monthly volume of minutes, SMS and data in your country, any voice call, SMS and data session you make while travelling abroad in the EU will be deducted from that volume as if you were at home, with no extra charges. This means the end of roaming charges as Europeans experience them today in their daily life.
The EU has gradually imposed caps on roaming charges, and the current ones of €0.19/minute for calls and €0.06 per text message aren’t too bad, but €0.20/MB for data is the killer, making it easy to rack up a hefty bill with perfectly normal use of a smartphone in other European countries.
The EU has also agreed to net neutrality rules, though watered down with exceptions for ‘innovative’ services that require higher than usual bandwidth – like Netflix. The EU says that these services can be prioritized so long as this doesn’t harm other services, but as everyone would otherwise get the fastest speed for everything, this provision doesn’t appear to have any real meaning.
European Union Stories June 1, 2015
European Union Stories April 2, 2015
Apple’s planned rebranding and relaunch of the Beats streaming music service has not had the easiest of rides. The launch, initially planned for earlier this year, was delayed by the departure of key execs and difficulties integrating Beats and Apple technologies. A planned $5/month price-point had to be abandoned in favor of an attempt at $7.99/month when music labels wouldn’t play ball, and that too now looks increasingly unlikely even though Google Play offered initial All Access Signups for a $7.99 locked in. And any plans to offer artist exclusives as an inducement now face competition from newly-relaunched Tidal.
Just when it seemed things couldn’t get any tougher, London’s Financial Times reports that the European Commission is considering launching an antitrust investigation into the service, even before it launches. The Commission has contacted several music labels to ask what deals have been done with Apple, says the FT.
The commission, which also has contacted Apple’s music-streaming rivals, is said to be concerned that the company will use its size, relationships and influence to persuade labels to abandon free, ad-supported services such as Spotify, which depend on licenses with music companies for their catalogues.
The newspaper implies that the investigation may have been triggered by a formal complaint by an existing streaming music service … expand full story
European Union Stories March 5, 2015
EU court says ebooks aren’t books, must be subject to higher tax rates
Europe’s top court has declared that ebooks are ‘services’ rather than books, and that European countries are not allowed to give them the same favorable tax treatment as paper books. The reasoning, such as it is, is that ebooks cannot be used without a physical device, and ebooks are a service provided to those devices.
Both France and Luxembourg have applied to ebooks the same reduced rate of VAT (sales tax) enjoyed by books made from crushed trees. The WSJ reports that the EU has ruled that this is illegal.
Since 2012, France has applied a 5.5% VAT rate and Luxembourg a 3% VAT rate on e-books, the same rate as for paper books. The European Court of Justice said both countries must apply their normal VAT rate, which for France is 20% and for Luxembourg is 17%.
Europe already closed one ebook-related tax loophole: Amazon used to use its Luxembourg base as a reason to charge just 3% on ebook sales throughout Europe, but a change in the law forced it to apply the VAT rate applicable to the customer’s own country.
There is some small hope that sanity may prevail in future. The European Commission has said that there may be legal mechanisms through which countries can in future define their own policies, with an “extensive overhaul” of VAT rules to be completed next year. However, don’t be surprised if ‘harmonization’ of tax rates for paper and digital books results in higher taxes on the former to pay for lower taxes on the latter …
Apple of course had its own legal troubles around ebooks, with its pricing model found to amount to anti-competitive practices.
European Union Stories February 25, 2015
It seems Tim Cook had more on his schedule than a meeting with BILD during his visit to Berlin yesterday: the newspaper reports that he also met with German Chancellor Angela Merkel. Cook told BILD that they discussed security, net neutrality, environmental protection and education–but the key topic appears to have been data privacy.
Cook said that he could well understand Germany’s strong stance on data privacy, stating that Germans “have the same views on privacy as I do” … expand full story
European Union Stories January 23, 2015
Apple extends sanctions-compliance in Crimea by blocking sales of all Apple products & services
Apple has ordered resellers to cease all sales of Apple products and services in Crimea as of 1st February. This follows the termination of agreements with app developers in the region earlier this week. Apple states that both moves are to comply with sanctions on the Crimea region of the Ukraine imposed by the US Government. The company informed retailers of the decision by letter.
With reference made to Section 5G, «Export Compliance» of Apple Authorized Service Provider Agreement dated 01.04.14, please be informed that in accordance with the new sanctions on the Crimea Region announced by the US Government on December 19, 2014 you shall not sell Apple products and/or provide services related to Apple products in the Crimea Region as of February 1, 2015.
The US joined the EU in imposing economic sanctions in protest at Russia’s annexation of the Crimean peninsula, which legally remains part of the Ukraine. Google has likewise started to block AdSense and Adwords accounts in the region, and Google Play services will cease on 1st February.
TechCrunch notes that the political conflict could escalate, with the possibility that Russian government may retaliate by blocking the sale of US imports into Russia–an important market for many US companies, including Apple.
Apple recently responded to a dramatic fall in value of the Russian ruble by temporarily halting online sales before returning with a 35% increase in prices to reflect the current dollar exchange rate. It also increased the prices of apps in the Russian App Store.
European Union Stories January 9, 2015
Update: It appears subscriptions through iTunes (like magazines) that saw price increases have seen the auto-renew function disabled, a 9to5Mac reader reports, likely to avoid a higher subscription rate being charged, although users have not yet been notified of the change.
Apple has increased the prices of apps in all countries in the European Union in line with the email sent to developers a couple of days ago. Apple has made the move in response to shifts in currency exchange rates and varying tax rules.
Prices are also being increased in Norway and Russia, though Icelandic residents will see a price cut … expand full story
European Union Stories January 7, 2015
Apple has sent an email to developers informing them of upcoming changes to app pricing in Canada, the European Union, Norway, Iceland, and Russia. These changes, which take effect later this week, are not the same as the recent change to country-specific VAT rates, and impact a wider range of markets.
The pricing updates are being implemented to accommodate changing tax and currency exchange rates. Prices will go up for customers in all of the affected countries except Iceland, which will see a decrease. Russia’s prices will “change,” according to the email, but there aren’t any additional details on what that may mean.
European Union Stories December 17, 2014
Apple announces changes to European App Store taxes to take effect January 1st
Apple has sent an email to iOS developers informing them of upcoming changes to the way taxes are handled on European App Store purchases. Rather than use the same VAT rate across the entire European Union, Apple will now calculate the charges based on the customer’s home country.
This could lead to a rise in app prices in some countries where value-added taxes are higher than users are currently being charged. Apple also notes in the email that developer’s cuts of app profits will be calculated after the VAT has been deducted from the purchase price.
The changes will go into effect on January 1st. Apple’s tax practices recently came under fire from government authorities.
European Union Stories September 12, 2014
The officials found that 60% of apps raised privacy concerns, based on three criteria: They did not disclose how they used personal information; they required that the user give up an excessive amount of personal data as a condition of downloading the app; and their privacy policies were rendered in type too small to be read on a phone’s screen …
European Union Stories July 18, 2014
The European Commission has complained that Apple is taking too long to implement protections for freemium games in the App Store, reports BBC News. The Commission has decreed that both Apple and Google, the two biggest app store vendors, must make the “true cost of apps” clear before purchase. However, officials are upset that Apple has not yet committed to any such measures.
“Regrettably, no concrete and immediate solutions have been made by Apple to date to address the concerns linked in particular to payment authorisation,” the Commission said in a statement.
“Apple has proposed to address those concerns. However, no firm commitment and no timing have been provided for the implementation of such possible future changes.
European Union Stories June 10, 2014
EU launching formal investigation into Apple’s tax practices in Ireland
According to a report from Ireland’s RTE.ie, the European Commission has decided to officially launch a formal investigation into Apple’s tax practices in the country (via The Loop). An announcement is expected by EU officials tomorrow:
The European Commission is to open a formal investigation into Apple’s tax arrangements with Ireland… An announcement is expected to be made by Competition Commissioner Joaquin Almunia tomorrow… EU state aid rules are designed to prevent unfair practices, although it is not clear that countries offering favourable tax terms to companies or industries would violate such rules.
Apple last year faced U.S. Senate hearing on its offshore tax practices in which it denied taking advantage of any tax gimmicks or loopholes in Ireland. The EU shortly after launched an investigation into tax agreements with multinational companies in Ireland and number of other EU countries, while government officials in Ireland denied claims of a special 2% tax deal with Apple.
Later, in October of last year, the SEC in the U.S. ultimately closed its own investigation without establishing any wrong-doing on Apple’s part.