Here are some key questions surrounding the decision. “If the European Commissioner is discriminating, answering by discriminating yourself is not the right way to go”.
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The EU commission recently ruled that Apple had received illegal tax benefits from Ireland, which was contrary to EU laws.
Those tax policies amounted to “illegal state aid” that gave Apple an unfair advantage over other companies operating in Europe, Vestager added.
How does such a “sweetheart deal” work?
“Ireland must now recover the illegal aid”, said the EC in a statement.
What has the commission said?
In an open letter to Apple customers, Tim Cook, chief executive, said the ruling would strike a devastating blow to the sovereignty of European Union member states over their own tax matters, and to the principle of certainty of law in Europe. The country’s Deputy Prime Minister Mehmet Simsek said on Twitter the move would help the company avoid “EU bureaucracy”.
Apple was found to be holding over US$181 billion in accumulated profits offshore, more than any USA company, in a study published past year by two left-leaning nonprofit groups, a policy critics say is created to avoid paying U.S taxes.
The decision covers taxes which would have been due in 2003-2014. Authorities want the company to pay Ireland back taxes for the 10 years prior to 2013, when officials first requested information about this case.
How have Apple and Ireland reacted? The Irish government has also attacked the ruling as “bizarre”.
The EC’s finding that the iPhone maker received illegal tax breaks from Ireland is an attempt to “rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the worldwide tax system in the process”, Apple CEO Tim Cook said in a statement. “For every dollar in tax Apple has to repay in Ireland, they may get to reduce their United States tax bill by $1”, said Stuart Gibson, a former government tax official, now editor of Tax Notes International.
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.
Stiglitz, who was on Today with Sean O’Rourke this morning to promote his new book, said that the government’s decision to appeal was “wrong”.
Lew also said he had told corporate leaders that driving companies’ tax burdens to an absolute minimum carried risks to their reputations.
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Cook said the most harmful effect of the ruling will be on investment and job creation in Europe as using this theory other companies doing business in the European Union too are at risk of “being subjected to taxes under laws that never existed”. A Treasury spokesperson issued a statement, saying that, “These actions can threaten to undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the US and the EU”.
