We reported earlier this summer that Apple could be liable for paying as much as $14.5 billion in back taxes, as determined by a lengthy, two-year investigation into the company’s Ireland-based business subsidiaries by the European Commission — the European Union’s foremost regulatory body, whose constituents determined that Apple received “illegal state aid” from the Irish government, which took the form of a super-low corporate tax rate.
Well, one thing led to another in that epic, international fiasco — with Apple Chief Executive, Tim Cook, at one point suggesting that the EU’s ruling was “just a bunch of political crap.” However, in typical Apple fashion, it appears the Cupertino-company is gearing up to file an appeal against the EU’s ruling — arguing that regulators on the commission “deliberately ignored the opinions of tax experts and corporate law in handing down their judgment,” according to a report published by Reuters.
The EU’s extensive investigation into Apple’s Irish-based business dealings initially revealed that the country’s government had granted Apple a historically low, 3.8% corporate tax rate, which was based on the roughly $200 billion that Apple generated through its Irish subsidiaries over the course of the last decade.
However, as Apple’s tax attorneys were quick to note, Cupertino’s former advisers had conducted meetings with the Irish government as far back as 1990 — resulting in Apple being granted a cap on the total amount of corporate tax it would pay moving forward, particularly since the company’s Cork, Ireland-based headquarters are comprised largely of marketing and infrastructure-focused subsidiaries, rather than true capital generating entities like Apple retail stores.
Apple’s Chief European Counsel, Bruce Sewell, even went so far as to suggest that his company was handed the $14.5 billion tax bill because it “is a convenient target since it generates lots of headlines.”
In any case, while Apple will reportedly be appealing the EU’s decision via Europe’s second-highest court later this week, the Silicon Valley tech-giant won’t be the only heavyweight filing an appeal against the commission’s decision. In an apparent attempt to defend the integrity of its dealing with all multi-national companies, the Irish government, too, will be filing its own appeal against the EU commission’s tax demand — not just to protect Apple, but the country’s own image as a “safe haven” for corporate entities seeking the country’s attractive tax policies.
In fact, just this morning the Irish government released an official statement, alleging that the EU’s commission had “misunderstood the role of Apple’s Irish subsidiaries,” while adding that the commission “exceeded its powers” by pursuing Apple in search of unfounded tax revenue.
“The Irish Government said, in a briefing document released today ahead of the expected publication of the commission document, that the commission had fundamentally misunderstood the role of the Apple subsidiaries at the centre of the case. It said these Apple branches carried out routine functions and that all key decisions – and the vital design and development of Apple’s products – were conducted in the US. The profits were thus not taxable in Ireland,” the Irish Government said in its document released Monday morning.