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Apple appeals against EU Irish tax ruling

Apple has argued that the European Commission ignored tax experts and corporate law, and that it singled out the tech giant because its name generates headlines

19 December 2016, 5:32pm
The European Commission has ordered Ireland to recover €13 billion in undue tax benefits from Apple
The European Commission has ordered Ireland to recover €13 billion in undue tax benefits from Apple
Apple has filed an appeal against an EU ruling that it should pay some €13 billion in back taxes to the Republic of Ireland, arguing that it had been singled out and was a “convenient target”.

Apple’s European headquarters are located in Ireland – where the standard rate of corporate tax is 12.5%. However in August, the European Commission ruled that Apple’s tax agreements with Ireland – which allowed the tech giant to pay a tax rate of no more than 1% - amounted to illegal state aid.

Apple issued a lengthy statement, noting that it was the largest taxpayer in the world, in the US, and in Ireland. It said that if the EU ruling went against it, then it would pay 40% of all the corporate taxes collected in Ireland.

It added that it paid a 26% tax on its worldwide earnings, but said it was correct that it paid most of that in the US.

“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.”

Apple’s general counsel Bruce Sewell told Reuters news agency that the EC had ignored tax experts roped in by the Irish authorities.

“Apple is not an outlier in any sense that matters to the law. Apple is a convenient target because it generates a lot of headlines,” Sewell said.

Ireland is also contesting the ruling, warning that EU regulators are meddling with national sovereignty.

“Ireland did not give favourable tax treatment to Apple- the full amount of tax was paid in this case,” Irish finance minister Michael Noonan said on Monday. “Ireland does not do deals with taxpayers.”

Apple is not the first corporation to have been targeted for securing favourable tax deals in the EU; last year, the EC told the Netherlands to recover €30 million from Starbucks, while Luxembourg was ordered to claw back a similar deal from Fiat.