Apple bites back. Technology giant fights EU tax ruling

  | James Innes

Apple has filed an appeal against the €13 bn. fine imposed on them earlier this year by the EU for what were deemed to be illegal tax arrangements in Ireland where the company has its European headquarters. The technology giant feels they have been unfairly singled out as a convenient target by EU regulators, and have now lodged a formal appeal against the financial penalty.

They are strongly supported by the Irish government who claim that the EU is infringing their national sovereignty. On December 19th, Ireland’s finance ministry said the European Commission had “misunderstood the relevant facts and Irish law”. “Ireland did not give favourable tax treatment to Apple – the full amount of tax was paid in this case, and no state aid was provided. Ireland does not do deals with taxpayers”.

Meanwhile Apple issued a statement claiming it is the largest taxpayer in the world, in the US, and in Ireland, and that the argument was not about how much tax the company pays, but where that tax is paid. While EU regulators claim that Apple’s tax arrangements in Ireland meant that the company had ended up with an effective tax rate there of only 1%, the company said they paid most of their tax in the US where their products and services are “created, designed and engineered”.

Apple’s general counsel Bruce Sewell told the Reuters news agency that the Commission had disregarded the advice of tax experts brought in by the Irish authorities, and that the company was a convenient scapegoat because it “generates lots of headlines”.

The case will probably take many years to settle, and it is by no means clear who will win the ultimate argument. Meanwhile, Apple is not the only company who has been targeted for securing favourable tax deals in the EU. Last year the commission ordered the Netherlands to recover €30 million from Starbucks, and Luxembourg to claw back a similar sum from Fiat.

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