While the EU Competition Commission has said tax rulings are not problematic per se, they are concerned about rulings that depart from general rules to the benefit of individual undertakings (i.e. sweetheart deals).
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The Irish cabinet, however, has a different answer, as it has chose to appeal the decision from the European Commission earlier this week, which ruled that it was owed that amount in back taxes from Apple, the New York Times is reporting.
Earlier this week, the EC determined that a tax arrangement between the electronic giant and Irish tax authorities – which saw Apple move the bulk of its profits to a company that existed only on paper – amounted to illegal state aid.
Apple plans to appeal against the European Commission’s ruling, and said it sincerely hoped that the Irish government would do so too. Those additional employees pay taxes to the government. “The EU Commission’s overreach in this regard, is unbelievable to us”.
Because of a tax deal with the Irish government, Apple never had to pay much tax on its earnings. A motion will come before the parliament next week seeking an endorsement of that decision.
Apple’s bill far exceeds the previous European Union record for a state aid case: 1.3 billion euros for the Nurburgring race track in Germany.
Tim Cook has responded with a long and strongly wordy statement, which you can read in full here. According to the Commission’s investigation, Apple’s claim that it reinvests its revenue in the foreign territories that earn them was false.
“Bowing to the commission’s ruling would.be a tacit acknowledgement that there has indeed been something rotten in the low-tax regime that Dublin operates to attract multinationals”, it said.
The Treasury is upset because whatever is paid to Ireland is deductible from what Apple would owe when it brings profits stashed in Ireland back to the United States.
“We stand by the treaty”.
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. It ordered Ireland to recover unpaid taxes from Apple of up to 13 billion euros, plus interest.
Mr Cook told RTE that the Commission’s claim that “Ireland’s selective treatment of Apple allowed the company to pay an effective tax rate of 0.005 percent on its European profits in 2014” was an untrue figure and that the company paid “a worldwide income tax rate” of 26.1 percent that year.
Meanwhile, EU President has warned Ireland must obey the ruling.
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“So the comments of Mr Cook on Morning Ireland today are completely at odds with evidence given by him and his head of tax policy at the US Senate hearings in 2013”.
