We’re back to that landmark EU ruling which says that Apple should pay $14b in taxes it may have enjoyed from the Irish government in what they described as illegal aid. Apple and EU have both kicked back against the ruling and announced at the time that they were going to appeal the ruling. Well the Irish government formally made its objection public and according to The Irish Times, the government said the EU Commission had misinterpreted Ireland’s tax laws and wrongly ruled that profits not attributable to activity in Ireland should have been taxed here.
The European Commission is expected to publish its own full ruling today although some sensitive commercial information will be kept away from the public at least for now. The Commission has accused the Irish government of deliberately favouring Apple and other American companies with respect to taxes over the years and is demanding that Apple especially be made to pay back the money it owes. This according to the EU Commission means Apple profits in non-American markets should have been taxed by Ireland seeing as its main international operations are based in the country.
But the Irish government says “the commission had exceeded its powers and interfered with national tax sovereignty.
It accuses Brussels of involving novel tax rules, not following required procedures and failing to provide proper reasons for its decision.”
Apple on the other hand has launched its own legal challenge with Ireland against the EU Commission. In an interview with Reuters, General Counsel Bruce Sewell and Chief Financial Officer Luca Maestri said Apple plans to appeal the ruling at Europe’s second highest court. Maestri said the Commission over-estimated the importance of the company’s European headquarters in Cork in the south of Ireland but European Competition Commissioner Margrethe Vestager and a former Danish economy minister is arguing that the base on which we should pay taxes in Ireland is essentially all the profits we generate outside the United States … in a place that doesn’t do any engineering, doesn’t generate any intellectual property for us,” he said, adding it was an “absurd theory.”
In all, it looks like this is going to be a long fight as a new administration is set to be inaugurated next month in the United States. President-elect Trump campaigned on reforming the US tax code which would see American companies that have stashed money abroad to repatriate them in a bid to return jobs to the United States.
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