The European Commission on Monday ordered the USA technology giant to pay up to $14.5 billion in back taxes to Ireland.
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European officials said they are following long-standing laws that prohibit illegal state aid to companies and that they are not specifically targeting American companies.
“When you’re accused of doing something that is so foreign to your values, it brings out an outrage in you, and that’s how we feel. I am very confident that this government will work its way through this issue and continue with the mandate the Irish people have given us”. “In Ireland and in every country where we operate, Apple follows the law and we pay all the taxes we owe”, Cook said in the letter. Apple has always been about doing the right thing.
But Competition Commissioner Margrethe Vestager may be tempted to train her fire on European companies after a string of investigations of US global giants that, especially after Tuesday’s Apple verdict, has enraged the United States.
Speaking on RTÉ’s Today with Sean O’Rourke Mr Stiglitz also described the idea that the number multinational jobs in Ireland could be adversely impacted by the ruling as “nonsense”.
However, Ireland could be set to lose long-term investment from the ruling, with Apple amongst a host of corporations who now have operations based in the country due to its low corporate tax rates.
Despite the mammoth tax bill, Apple insists it will not abandon Ireland, where it has about 6,000 employees and is planning to build a huge data centre.
The chief executive dismissed an audit by a Brussels watchdog which found it only paid 0.005% tax in 2014, and claimed the global tech brand paid a worldwide rate of 26.1% on its earnings that year.
Apple’s Irish tax arrangement was considered “the most brazen” among multinational United States technology firms, said Ms Aisling Donohue, a partner at tax and business advisory firm MGPartners in Ireland.
“Right now I would forecast that repatriation to occur next year”.
US tax law gives the Obama administration power to double tax rates for European companies should it choose to dramatically escalate a dispute with the European Union over Apple’s tax bill.
“[The EC] is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been”.
This week, the European Union ordered the company based in Cupertino, California, to pay $14.5 billion in back taxes to Ireland plus billions more in interest.
“It is quite obvious that the Commission will not be able to investigate 1,000 tax rulings”.
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Not surprisingly, Apple plans to appeal the decision – and its shares hardly moved on the news because (as Jim Cramer pointed out) this is a company with around $200 billion in cash. But it failed to agree a position, and will meet again on Friday to decide whether to appeal against the Commission’s decision.
