Ireland to challenge EU ruling on Apples $14.5 billion tax bill

Apple logoIrish ministers confirmed on Friday, after days of talks, that they will appeal against the European Union's Apple tax ruling.

Earlier this week, Ireland was ordered by the European Commission, the executive arm of the EU, to reclaim 13 billion plus interest in back taxes from Apple.

The issue initially threatened to split the government with independent ministers saying they were reluctant to challenge the decision.

On Tuesday, the EUs competition chief Margrethe Vestager said that a two-year investigation into so-called sweetheart tax deals in 1991 and 2007 had found Apple guilty of receiving illegal state aid from Ireland. It had allowed Apple to pay an effective corporate tax rate of one percent on its European profits in 2003, down to as low as 0.005 percent in certain years, according to Vestager.

Apple has vehemently disputed the claim and said it will appeal against the ruling.

The Irish government has similarly denied any wrongdoing. Immediately after Vestager revealed her decision, Finance minister Michael Noonan said Ireland must launch an appeal against it. But independent ministers resisted and the cabinet failed to reach agreement on Wednesday.

 

On Friday afternoon a compromise was finally reached during a short cabinet meeting. Ireland will appeal against the ruling that it had supplied illegal state aid worth 13 billion to Apple, butin a concession to reluctant MPsan independent review of the tax treatment of multinationals in the country will take place.

The Dáil, which is the lower house of the Irish parliament, will meet next Wednesday to approve the plan, Noonan said.

"Our appeal will be founded on advice and documentation of the attorney general," added Noonan. He claimed "no preferential treatment" had been dished out to Apple.

"Apple constructed it's company to use the tax regime. Any company could have done the same. This is an intrusion beyond the competence of the commission," he said.

Irish Minister for public expenditure Paschal Donohoe expressed concern about the impact of the decision on jobs and the economy.

Noonan said: "Theres envy across Europe about how weve managed to establish so many HQs in Dublin. We stand by our 12.5 percent tax rate."

Apple has also said it will appeal against the decision. Its chief Tim Cook didnt mince his words on Wednesday, calling the ruling "total political crap." Vestager refuted that claim and said the decision was based on the facts of the case.

Source: Ars Technica

Tags: Apple

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