European Commission Appeals Ruling In Apple’s $15 Billion Irish Tax Case
Ireland, which has one of the lowest corporate tax rates in the EU, has long sought investments by foreign companies
Vestager has spearheaded a campaign to form new tax laws for foreign tech firms like Apple
Dublin has always contended that it did not provide any tax breaks or state aid to Apple
The European Union said it will appeal a court ruling from July that found in favor of U.S.-based tech giant Apple (AAPL) in a 13 billion euro ($15 billion) Irish tax case.
The appeal will be heard in the European Court of Justice in Luxembourg.
The complex case involves allegations that the government of EU member Ireland provided unfair tax breaks to Apple. Initially, in 2016, the European Commission – the executive branch of the EU – ordered Apple to cough up 13 billion euros in back taxes that it claimed it owed to the Dublin government covering the period 2004 to 2014.
Although both Ireland and the smartphone maker appealed that ruling, Apple nonetheless paid the tax bill, but placed the money in escrow in 2018 while litigation continued back and forth.
In July of 2020, the European General Court – which is itself a constituent of the Court of Justice of the EU and which hears cases brought against the EU – determined that the European Commission "did not succeed in showing to the requisite legal standard" that Apple had taken advantage of Ireland's taxation laws.
That ruling overturned a prior order that Apple had to pay billions in taxes to Ireland.
"This case is very important because it will set a precedent for cases we want to fight going forward," an EU official told the Financial Times.
The European Commission has long claimed that Ireland illegally permitted Apple to attribute almost of its earnings derived in the EU to an Irish “head office” that did not physically exist, thereby allowing Apple to avoid paying taxes on revenues generated in the EU. Ireland, in fact, serves as Apple's base for its operations in Europe, the Middle East, and Africa.
Ireland, which has one of the lowest corporate tax rates in the EU, has long sought investments by foreign companies. The Dublin government apparently is willing to forego the huge tax bill in order to promote Ireland as an attractive investment target for international firms.
Margrethe Vestager, executive vice president in charge of competition policy at EU, has spearheaded a campaign to form new tax laws for foreign tech firms like Apple that do extensive business in Europe.
https://www.ibtimes.com/european-commission-appeals-ruling-apples-15-billion-irish-tax-case-3051953