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Screw EU! Apple to fight back over €13bn tax bill

Ireland, desperate to keep iGiant onside, adamant US mega-corp paid its fair share

By Kat Hall, 19 Dec 2016

Apple and the Irish government are to appeal a European Union ruling that it should pay up to €13bn (£11bn) in back taxes in Ireland – in a decision that will surprise no one.

Back in August the European Commission ruled that tax arrangements between Ireland and Apple were in breach of the EU's state aid laws, and said that Apple needs to pay €13bn.

In a full version of its August ruling published today, the Irish government failed to justify why Apple received “selective treatment” when it came to paying tax in Ireland, the European Commission has said.

This selective tax treatment of Apple in Ireland is illegal under EU state aid rules, because it gives Apple a significant advantage over other businesses that are subject to the same national taxation rules, said the commission.

But Ireland's finance ministry said this week it does not accept the Commission's analysis, which is why it has lodged an application with the General Court of the European Union to annul the whole Decision.

"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," it said.

In a separate statement, Apple said it paid a 26 per cent tax rate on its worldwide earnings.

"Because our products and services are created, designed and engineered in the US, that's where we pay most of our tax... this case has never been about how much tax Apple pays, it's about where that tax is paid."

In an interview with the Irish Independent in September, chief exec Tim Cook dismissed the case as "political crap."

The Commission launched its investigation into the tax arrangements between Apple and Ireland in 2014.

Apple has a significant base in Ireland and is in the process of opening a mega €850m data centre in Galway.

Until now, Apple has managed to route almost 90 per cent of its profits outside of the US through its Irish subsidiaries, as they hold the rights to all of the company's intellectual property.

The commission said Ireland must arrange to recover the €13bn, which it said is not a penalty but rather the sum of Apple’s unpaid taxes. It is the largest ever recovery order issued by the EC.

European Commissioner for Competition Margrethe Vestager said at the time: "EU state aid rules have been in force since 1958 and apply to all companies that choose to operate in the EU Single Market. State aid rules ensure that companies can compete on equal terms, also as regards taxation in each Member State. And these rules protect European taxpayers."

"State aid is state aid, no matter if it comes in forms of a free piece of land, a grant, a very beneficial loan or a tax benefit." ®

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