Finance Minister Michael Noonan has insisted Dublin would fight any adverse ruling ever since the European Union began investigating the USA tech giant’s Irish tax affairs in 2014, arguing that it had to protect a tax regime that has attracted large numbers of multinational employers.
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Tim Cook, Apple CEO, spoke out against an European Union ruling that the company pay billions in back taxes to Ireland, calling the decision “total political crap”.
Meanwhile, Treasury Secretary Jacob Lew has said the decision may push Congress to finally address the stalled effort to reform America’s corporate tax structure.
The appeals by the Irish government and Apple are expected to last years.
That feeling is most acute in Cork, the city in the south of Ireland that is home to Apple’s European headquarters.
Apple’s chief executive says the company has put aside “several billion dollars” to pay tax liabilities in the United States as it repatriates some of its huge overseas earnings.
In the case of Apple, the claim is that it owes this amount in taxes for the period 2003-2014 to Ireland, to which, under deals negotiated in 1991 and 2007, its shadow office in Ireland paid taxes at a rate of 0.0005 percent in 2014, for example.
A review of tax arrangements in Ireland will also be carried out following calls from independent ministers. 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.
After meeting to discuss the matter, ministers are now ready to appeal against the ruling. “This is a decision based on the facts of the case, looking into Apple Sales International, how they are arranged within Ireland, and the profits recorded there – how they are taxed”. Cook has already hinted that the company may bring some of its “war chest” cash back to the United States next year, allowing the company to spend more on R&D, but also meaning that money will be taxed by the U.S. government.
Last week, the US Treasury lashed out at the commission΄s approach, arguing that it is “inconsistent” with worldwide norms and undermines the global fight against tax avoidance. By the time other European countries have sought their slice of the €13bn plus interest, there may well be only a few billion left for Ireland, but you can do a lot with a few billion in infrastructure, public services, housing and reducing the costs of living and doing business.
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“We are applying the rules”, he said. “I think we need to accept this decision”.
