It said that if the Commission decides to enforce a tougher accounting standard, Apple may owe taxes at a 12.5 percent rate, on $64.1 billion (£44.6bn) in profit generated from 2004 to 2012.
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Irish Times columnist Fintan O’Toole quipped that Ireland’s tricolor flag should have an Apple logo in its center and the country now risked being defined by “the rest of the world as the tax-avoider’s insane little sidekick”.
“Any ruling that is inconsistent with global tax standards and harms American business overseas with retroactive measures is inherently unfair and encroaches on US tax jurisdiction”, said Sen. This is a question of unpaid taxes and that is a completely different thing.
“The Commission’s move is unprecedented and it has serious, wide-reaching implications”, Apple CEO Cook (pictured above) said in an open letter to the Apple Community in Europe posted on the company’s Web site today. The EU has previously claimed that this amounts to illegal state aid, while the Irish government has denied any breach of EU law. “We will appeal and we are confident the decision will be overturned”. “It will have a profound and harmful effect on investment and job creation in Europe”.
The EU’s ruling follows an investigation into the taxes Apple paid in Ireland between 2003 and 2013.
Mr Cook dismissed the three-year investigation and went direct to his customer base with a message on apple.com and a vow to fight the order in what will likely be years of courtroom battles.
The bloc’s competition watchdog, Margrethe Vestager, will hold a press conference at 1000 GMT in which sources told AFP she is set to announce the European Commission’s findings on the case.
The U.S. Treasury Department released a report last week claiming that American companies were being unfairly targeted in the probe and that doing so could end up costing American taxpayers.
European Union states wanting to secure investment by helping companies avoid tax will in future be more careful about leaving a paper trail which could suggest a tax ruling is a sweetheart deal.
Irish junior finance minister Eoghan Murphy said: “We don’t believe we gave any state aid to Apple”.
But Ireland has to weigh up the cash windfall against the potentially more long-term damage the ruling could do to its image as a low-tax place to do business.
Neil Wilson, markets analyst at ETX Capital, said: ‘The European Commission seems to be treading very close to interfering with the tax rules of member states, effectively telling Ireland how much tax it ought to levy. “Member states can not give unfair tax benefits to selected companies, no matter if European or foreign, large or small”, Vestager said.
But it said those deals were made under worldwide treaties and accepted tax practices. In government coffers, that money would easily wipe out Ireland’s 2016 deficit and put the country back in the black for the first time in a decade.
The EU’s principal legal adviser on tax, Richard Lyal, wrote in a legal journal a year ago that “It is likely to be only in extreme cases that one can with confidence say that a particular decision reflects a misapplication of the chosen method”. Apple acted within the boundaries of Ireland’s tax laws and under the advice of the local government.
The chairman also stated that “there was no departure from the applicable Irish tax law by Revenue, there was no preference shown in applying that law and the full tax due was paid in accordance with the law”.
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With 5,000 workers and another 1,000 promised, Apple is the single biggest employer in Cork, Ireland’s second-biggest city, and one of several United States tech giants with their European hubs in Ireland. “The decision leaves me with no choice but to seek Cabinet approval to appeal the decision before the European courts”.
