Ireland and the Netherlands were at the centre of tax-avoidance strategies known as the “double Irish” and “Dutch sandwich” used by multinationals, especially US tech companies. No one did anything wrong here and we need to stand together.
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Ireland’s nominal corporate tax rate is 12.5 percent; the US rate is 35 percent. Supposing the state-aid rules were indeed broken, that would at least come closer to punishing the principal offender, Ireland’s government.
Juncker also rejected USA criticism of the order for Ireland to collect $14.5 billion in back taxes from Apple.
Mr Hogan said he did not believe Ireland’s decision to appeal the ruling would have any impact on the country’s ability to influence the arrangements that would emerge when the United Kingdom exits the European Union and the willingness of other EU states to listen to Ireland’s arguments for it to maintain a special relationship with the UK. The report goes on to say the USA would “consider potential responses should the Commission continue its present course”.
Claims that an EU decision to present Apple with a €13bn (£11bn) tax bill was designed as an attack on the United States have been rejected by the European commission president, Jean-Claude Juncker.
“It would be absurd to choose this territory of state taxation to attack the US”, he said, adding that most of the commission’s punitive measures were against European companies. Perhaps responding to the USA government’s ferocious complaints about Apple’s treatment, Vestager invited other governments to examine the ruling to see whether Apple’s supposed tax debt was due to them rather than Ireland.
Apple has hit back hard at the ruling, with Chief Executive Tim Cook warning in a public letter that it threatens to “upend the worldwide tax system”.
While Congress has been stuck in endless debates over how to respond, the European Commission has been launching investigations into the strategies used by a number of multinationals – many of them US -based – and levying penalties.
Jack Lew, the United States Secretary of the Treasury, said this retroactive €13 billion tax bill is an attempt by the European Union to snatch taxes that are owed to the US Treasury.
Over the years, Apple has paid a tax rate on its European profits as low as 0.005 percent over, according to the three-year EC investigation. In any case, the ruling seems to be prompting some changes to Apple’s tax systems.
The game is to negotiate deals to park profits in the country with the lowest available tax rate. “We are basing our decisions on facts and on the legislation”. He also said the tax ruling was politically motivated.
The Commission has also been investigating tax transfer pricing at Fiat, McDonald’s, Starbucks, and Amazon.
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Cook, in an interview with the Irish broadcaster RTE, said Europe’s tax clawback was politically motivated and “maddening”, and would be overturned on appeal.
