Apple must repay 13 billion euros in back taxes

Michael O'Leary

“The European Commission has concluded that Ireland granted undue tax benefits of up to 13 billion euros to Apple”.

Tim Cook, CEO of Apple, responded with a statement saying that Apple and the Irish government would appeal the ruling and that the European Commission had “launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the worldwide tax system in the process”. Two tax rulings granted by Ireland have artificially reduced Apple’s tax burden for over two decades in breach of European Union state aid rules.

Stating that Apple “follows the law and we pay all the taxes we owe”, Cook noted that his company is also “the largest taxpayer in Ireland, the largest taxpayer in the United States, and the largest taxpayer in the world”. It’s also in direct violation of many European countries’ treaty obligations. He accused the Commission of rewriting Apple’s history, ignoring Ireland’s tax laws and upending the global tax system.

Margrethe Vestager is the European Commissioner for Competition. These arrangements enabled Apple to draw some profit out of this whole deal. “It’s a big shot across the pond to USA companies”. Apple’s reserves are $120 billion.

“Member states can not give tax benefits to selected companies – this is illegal under EU state aid rules”, said Margrethe Vestager, Commissioner in charge of European Union competition policy, in a statement.

Both Ireland and Apple are appealing the decision.

“We should say to Apple, pop on over the Irish Sea and relocate here”.

Ireland must now recover the unpaid taxes in Ireland from Apple for the years 2003 to 2014 of up to 13 billion, plus interest.

In the case of countries that are not inclined to take a “friendly” hint, Washington will offer the kind of “advice” it conveyed through the late Richard Armitage to Pakistan’s then president Pervez Musharraf before beginning the so-called war on terror by invading Afghanistan: Co-operate or we will bomb your country back to the Stone Age.

“We don’t believe the Apple decision has any direct impact on James Hardie”, he said.

Multinationals have such huge revenue that these countries can reap big gains even from low taxes.

Apple creates jobs in Ireland.

Apple accused the commission of “making up” the figures.

Ireland’s finance minister Michael Noonan denounced the order from Brussels: “As far as I am concerned there is no economic basis for this decision”. Apple employs around 6,000 people across Ireland, and made overtures that those jobs would be kept there. Investors appeared less concerned about the ruling, with the company’s cash pile estimated to be around $200bn.

There will be a lot of fearless talk by politicians about getting U.S. multinationals who operate in this country to pay the taxes they owe.

The EC has been investigating the voracity of multinational tax avoidance schemes that it says illegaly shifts profits made in the European Union into tax havens overseas.

The Irish government maintains Apple pays the right tax. Apple officials have been in contact with the Obama administration on the issue.

Deputy Prime Minister Mehmet Simsek has invited the USA tech giant Apple move its investments to Turkey in the aftermath of the company’s tax crisis with European Union authorities.

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