Apple missed deadline to pay €13 billion in Irish back taxes

Apple is behind with its taxes, but the tax inspector doesn’t mind.

Last August, the European Commission closed a three-year investigation of Apple’s tax affairs with an order to the Irish government that it should recover about €13 billion (US$14.5 billion) in taxes that it believed Apple had underpaid over the last decade.margrethe vestager in dublin

Ireland has missed the deadline for recovering the billions, but Competition Commissioner Margrethe Vestager, who gave the Irish government four months to collect the taxes, is proving very understanding about the delay.

“The recovering is not done yet but we have been working with the Irish authorities and we can see that they are moving forward to do the recovery of the unpaid taxes,” she said at a news conference in Dublin on Tuesday.

“It’s a tricky thing to do because it’s a large sum, so of course you have to figure out how to do that. It’s not an escrow account as in some of the other cases where it’s €25 million or €30 million or something like that,” she said. “I do respect that it’s a complicated matter and it may take a little more time than being within the deadline.”

Apple, naturally, is appealing the Commission’s decision, which its CEO Tim Cook famously described as “total political crap” — but the Irish government is appealing too, even as it pursues Apple for payment.

When those appeals will be heard by the European Court of Justice remains to be seen.

“The calendar is completely within the hands of the court, so I know nothing of the timing of when it will be decided upon,” Vestager said.

In its investigation, the Commission found that Apple’s effective tax rate on profits funneled through two Irish subsidiaries was around 0.05 percent, falling to 0.005 percent in 2014. Apple’s U.S. parent company expects that for the first quarter of its 2017 fiscal year, which it will report later Tuesday, it will pay tax at the rate of around 26 percent.

Apple crosses Samsung in smartphone market, helped by the Note7 debacle

Apple has regained the top place in the smartphone market helped by the new iPhone 7 and 7 Plus, while rival Samsung Electronics grappled with the recall of its flagship Galaxy Note7 over overheating batteries, according to a research firm.161214 apple newyork

The iPhone maker shipped 78.3 million smartphones in the fourth quarter for a market share of 17.8 percent in comparison to 77.5 million smartphones shipped by Samsung, which had a market share of 17.7 percent, Strategy Analytics said Tuesday.

For the full year, Samsung was the clear winner with shipments of 309.4 million smartphones to Apple’s 215.4 million, in part because Apple saw shipments of the iPhone drop in recent quarters.

Apple said earlier on Tuesday that it had sold more iPhones than ever before and set all-time revenue records for the device as well as the Mac, Apple Watch and its services business. For its fiscal 2017 first quarter ended Dec. 31, 2016, Apple said iPhone shipments were up by about 5 percent by units from the same quarter in the previous year. Revenue from phones was up 5 percent year-on-year at around $54 billion.

The upside for Apple in the smartphone market going forward will be limited unless the company comes up with revolutionary new smartphone designs to address a market that is suffering iPhone fatigue, wrote Neil Mawston, executive director at Strategy Analytics, in an email. Apple “received an expected bonus from Samsung’s Note7 fiasco in the fourth quarter of 2016,” and was able to pick up some Samsung customers and this helped lift its volumes, he added.

Samsung said this month that some 3 million Note7 phones were affected by the recall.

A significant part of Samsung’s shipments consists of budget smartphones that the company ships to price-sensitive markets like India. Apple has tried to reach such customers by offering earlier models at lower prices and has recently tried to get permission from the Indian government for the import and sale of refurbished phones.

Strategy Analytics estimates that one in four of Samsung’s global smartphone shipments were low-end models in the fourth quarter, Mawston said. Samsung is the world’s biggest low-end smartphone vendor and has a strong presence in low-end smartphones across Africa, Asia, and Latin America, he added.

Overall smartphone shipments grew in the quarter at 9 percent to 438.7 million units, Strategy Analytics said. Growth for the full year was 3.3 percent with close to 1.5 billion smartphones shipped in the year. “Smartphone growth is recovering slightly due to stronger demand in major developing markets like China and Africa,” said Linda Sui, director at Strategy Analytics, in a statement.

Three Chinese vendors—Huawei, Oppo and Vivo—followed Apple and Samsung in the top five ranking, with Huawei leading the pack with a 10 percent market share in the quarter. This is the first time Huawei has posted double digit market share, the research firm said.