Following yesterday’s ruling Apple CEO Tim Cook said, “The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the global tax system in the process”.
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The three year probe into Apple’s Irish tax affairs has ended with the European Commission presenting the company with a €13 billion ($14.5 billion) tax bill.
Mr Cook said he was “very confident” the ruling would be overturned on appeal.
Finance Minister Michael Noonan will today seek Cabinet approval for an appeal against the European Commission’s ruling that the State must collect €13 billion in unpaid tax from USA tech giant Apple.
Both Apple and Ireland said they will appeal the decision in a process that Apple warned could take several years but with no impact on its cash balance or future tax rate.
Just last month, Facebook revealed that it had received a notice of tax deficiency from the Internal Revenue Service related to questions about how that company values its overseas holdings, particularly in Ireland.
Why does the EU’s ruling on Apple matter?
Mr Cook said the company have ” always been an advocate for a simple, straight-forward and transparent worldwide tax system.
On Tuesday, the European Union announced its decision after a three-year investigation into Apple’s tax deal with the Irish authorities. White House spokesman Josh Earnest argued that if Apple paid the back taxes, it might offset that amount against tax due in the US, which would be unfair to American taxpayers. And I think the right thing here is to stand up and fight against this over-reach.
Although, the usual rate of cooperation tax in Ireland is 12.5 per cent, the company paid tax at 0.005 per cent in 2014.
Apple employs about 5,500 workers in Cork, Ireland, where it is the largest private sector employer.
Ireland has a long-established policy of using lower corporate tax rates to attract investment from multinational companies.
The former chief economist at the World Bank said the State knew what it was doing with regard to agreeing tax deals with the USA tech company. This claim has no basis in fact or in law.
Critics in the U.S. Congress have denounced the move as a predatory money grab that would encroach on U.S. government jurisdiction and ultimately add to the federal deficit. The EU rules also try to ensure that a country can effectively tax profits generated in its territory. In October, the EU Commission ordered Starbucks and Fiat to pay 20 to 30 million euros for benefiting from so-called sweetheart tax deals in the Netherlands and Luxembourg. In January, the EU Commission, which polices EU rules, unveiled new plans to tackle the problem. Under current European Union rules, member countries can not give aid that grants companies or sectors an unfair advantage.
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Back in 2013, Congress investigated Apple’s suspected tax evasion through an Irish subsidiary.
