Apple chief executive Tim Cook condemned the European Commission (EC) ruling that the firm should pay Ireland €13bn (£11bn, $14.5bn) in back taxes as “political c**p”.
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Ireland could have the last laugh following the EU’s decision to force Apple to pay £11 billion in back taxes, says Tom Wesel of tax consultancy Milestone.
“I’m sure, if people need time to understand this matter, that we will create the time and space to do this properly”, Public Expenditure Minister Paschal Donohoe of Fine Gael told national broadcaster RTE when asked if Prime Minister Enda Kenny would allow the Alliance more time if they ask for it. Ireland’s Independent Alliance party says it is reviewing the decision and needs to consult with Noonan, tax officials, and independent experts.
Experts said the EU’s tough new approach could make American companies think twice about establishing offices in Europe.
The Commission’s investigation found that Apple paid an effective corporate tax rate of one per cent on European profits in 2003, falling to 0.005 per cent in 2014.
USA -based companies are taxed at a 35 percent corporate rate on their global profits but they get tax credits for payments to foreign governments and they don’t pay the us tax until they bring the money home.
Apple said it is appealing the decision, and CEO Tim Cook wrote an open letter discussing the ruling. “That’s how we feel”, he said.
In a separate interview on Thursday with Irish state broadcaster RTE, Cook said the European Union decision was “maddening” and that he was very confident his appeal would succeed. The deal results in Apple paying a far lower tax rate than the 35 percent corporate rate in the US.
The EU regulators on Wednesday ruled that a special scheme to route profits through Ireland was illegal state aid, Reuters reports.
The commission says member states can not give tax benefits to selected companies.
“You have seen today that [Trade Secretary] Liam Fox has laid out that we have had a record year for inward investment for the year up to May this year, which is proof we are one of the most attractive places to do business in”. In 2015, Starbucks was ordered to pay up to $34 million in back taxes to Holland. Companies based in the USA are subject to 35% corporate tax rate on global profits when they bring that money home, though they can also get tax credits for payments to foreign governments.
The landmark Apple tax ruling by the European Commission’s Competition Commissioner Margrethe Vestager is likely to be appealed by both the Irish Government and Apple.
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According to White House Press Secretary Josh Earnest, the decision is amounted to a “transfer of revenue from USA taxpayers to the EU”. “But the Commission is now calling to retroactively change those rules”.
