Apple boss Tim Cook yesterday described the finding as “political crap”.
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Ireland’s cabinet agreed on Friday to join Apple in appealing against a multi-billion-euro back tax demand that the European Commission has slapped on the iPhone maker, despite misgivings among independents who back the fragile coalition. But don’t expect the company to abandon its tax sheltering ways just yet says Bill Gale, Co-Director of the Urban Institute-Brookings Tax Policy Center.
The European Commission ruled Tuesday that Ireland illegally provided state aid to the company by failing to collect taxes over a over a 10-year period.
The Irish government has said it “disagrees profoundly with the commission’s analysis”.
He said Ireland’s special “sweetheart” tax deal with Apple led to a “substantial amount of lost revenue” and the government shouldn’t let the issue drag on.
The clawback decision at the European Union has ratcheted up scrutiny in the usa of the huge stockpile of cash that Apple and other American companies hold offshore.
Noonan has repeatedly condemned the EC, which started investigating Apple’s tax arrangements in Ireland two years ago. In any case, the ruling seems to be prompting some changes to Apple’s tax systems.
From the looks of things, Apple has already begun paying the standard Irish rate; its foreign tax provision rose to $2.9 billion in fiscal 2015 from $1.5 billion in fiscal 2014.
Cook told Irish broadcaster RTE that he is confident the ruling will be overturned.
“We provisioned several billion dollars for the United States for payment as soon as we repatriate it, and right now I would forecast that repatriation to occur next year”, Cook told RTE Radio 1. Cook has said the tech giant will set aside money – based on the calculations of Apple’s back taxes – in an escrow account if the court eventually sides with the commission.
USA companies hold some $2 trillion in cash offshore, protected from US taxes. Apple’s profits in Europe, the Middle East, Africa and India were thus, in principle, taxed in Ireland at close to a zero rate.
Apple was found to hold over $181 billion ($238 billion Cdn) in accumulated profits offshore, more than any USA company, in a study distributed a year ago by two left -leaning nonprofit groups, a policy critics say is meant to abstain from paying US charges. Now those provisions total about $30 billion, Apple said.
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Both appeals are expected to take several years. The Irish government, pushed by fears of losing its competitiveness in attracting global businesses, voiced plans to appeal the order just after the ruling was announced.
