Ireland to appeal EU’s $14 bn tax bill on Apple

The Irish government has today launched an attack on the European Union’s order that it collect €13bn in back taxes from Apple. Ireland accuses the European Commission of misapplying State Aid law, and of attempting to re-write Irish corporation tax rules. In a document released by the Irish government’s Department of Finance, eight points are made about how the EU is overreaching its authority.

"The Commission has exceeded its powers and interfered with national tax sovereignty," the document reads. The document was submitted almost four months after the penalty was imposed against Apple which is also appealing.
Apple's European headquarters are located in Ireland where the standard rate of corporate tax is 12.5%.

The EU says Apple's use of shell companies in the country meant its European profits were taxed at effective rates under 1%, allowing it to pay 0.0005% tax alone in 2014, 50 euro for every one million of profit. Ireland's decision to appeal, rather than take the money, is based around its economy's dependence on multi-nationals.

The benefits are obvious in Ireland, which has the fastest-growing economy in Europe driven by the exports of about 1,000 multinationals that employ 5% of the workforce and generate nearly a quarter of economic output. Apple today is the biggest private employer in the Irish Republic's second-largest city, Cork, with a workforce exceeding 5,500. Economists estimate Apple's Cork operation pumps around €16 billion ($17 billion) annually in salaries, tax and investment into the Irish economy.

The centrepiece of Ireland's argument, in this case, is that the authorities in Brussels should have confined themselves to policing illegal state aid that gives an unfair advantage to a particular company.

It says the EU has launched an assault on a policy that Ireland has offered to all foreign companies locating on its soil. The Department of Finance said: "The Commission has exceeded its powers and interfered with national tax sovereignty.
"The Commission has no competence, under State aid rules, unilaterally to substitute its own view of the geographic scope and extent of the member state's tax jurisdiction for those of the member state itself".

Apple has two units based in Ireland, Apple Sales International and Apple Operations Europe, which maintain offices and have employees there, but because they are nonresident companies, Ireland only requires the company pay tax on revenue credited to business done in Ireland.