The European Commission has said that Ireland had provided undue tax benefits of nearly €13 billion to the U.S. giant, Apple, which is illegal under EU state aid rules as it gives Apple a major advantage over other businesses.
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These politicians understand that deferral means the US Treasury is missing a substantial amount of revenue that could be used to fund various public services. Ireland’s Independent Alliance party says it is reviewing the decision and needs to consult with Noonan, tax officials, and independent experts.
After a two-year investigation triggered by a U.S. Senate probe, European Union officials on Tuesday said Apple had struck an illegal deal with Ireland that allowed the technology giant to pay nearly no taxes from 2003 to 2014 on profits for sales throughout the 28-nation region.
Apple was slapped with a record $14.5 billion tax penalty by the European Commission on Tuesday for its agreements with Ireland, and the country is now deliberating whether or not it will appeal against the ruling.
The investigation found that Apple routed nearly all the taxable profits from European sales to two Irish-based subsidiaries, which shifted the money to a “head office” that had no employees or facilities and was not taxed in any country.
Apple has said it will appeal the ruling which Cook attacked in an interview with the Irish Independent.
Ireland is not the only country whose tax arrangements with large U.S. multinationals are being investigated by the commission.
In Brussels, EU Competition Commissioner Margrethe Vestager vigorously defended the legality and arithmetic of the tax clawback order affecting Apple. Ireland essentially allowed Apple to pay substantially less tax than other companies.
Neither Apple nor the EC responded to a request for comment, nor did the Irish government. He said the decision was “political crap”.
On Tuesday, the European Commission ruled that Ireland illegally provided state aid to Apple by not collecting €13bn of taxes owed to it by the tech giant over a 10-year period.
Vestager said the findings arose from figures provided by Apple itself, as well as details which emerged during US Senate hearings into Apple in 2013.
Cook has complained in the past that high USA taxes have discouraged the company from bringing those earnings home.
Uber uses subsidiaries in the Netherlands to shield its overseas income from United States taxes. And our investigation is not into the Apple corporation as such, it is Apple Sales International and Apple Operations Europe. Cook likened the company’s relationship with Ireland to a “37-year-old marriage”.
Of this only €50m was considered subject to Ireland’s 12.5% tax rate meaning Apple paid less than €10m in tax.
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Irish tax law has changed since 1980 to become more appealing to global companies, but the use of an Irish subsidiary to channel billions of dollars of profits through a lower tax jurisdiction does not appear to be the company’s primary reason for opening a base there in 1980.
