Apple is doing a triumph dance today . The second - high European Union court of law has knock over a determination that the Cupertino - base tech giant would have to pay $ 14.9 billion ( € 13 billion ) in back taxes to Ireland .
It ’s a watershed profits , and a huge blow to the European Commission ’s attempts to crack down on multinational companies that cut illegitimate tax deals in Europe . In apress outlet , the General Court of the European Union wrote it side with Apple because “ the Commission did not win in showing to the requisite sound standard ” that the company ’s sweetheart tax hatful with Ireland gave it an unfair leg up .
https://gizmodo.com/european-commission-launches-investigation-into-the-app-1844052717
Photo: Drew Angerer (Getty Images)
This particular case has been over a 10 in the fashioning . The background is that Apple created two European underling , Apple Sales International ( ASI ) and Apple Operations Europe ( AOE ) , which were headquarter in Ireland . Between 2003 and 2014 , the CommissionsaidApple ’s corporate taxation rate fell from 1 % to just 0.005 % and that these agency could n’t have generated the profits that were claim . After atwo - year investigation , the European Commission ruled in 2016 that the Irish government had given Appleillegal state tending . According to theIndependent , Apple CEO Tim Cook characterized the case as “ entire political poop . ” Cook vehemently deniedin a letterthat Apple had abridge any pot with Ireland , enjoin the title had “ no basis in fact or in natural law . ” In 2017 , the society released astatementsaying the “ debate of Apple ’s taxis is not about how much we owe but where we owe it . ” By December that year , Applebegrudgingly agreedto repay what it owe , and in 2018,repaid the full amountin an escrow investment company ahead of the solicitation . As of last twelvemonth , Applesaidthe revenue enhancement bill “ defie[d ] reality and uncouth sentiency , ” indicating that ultimately it would really rather not have to repay anything at all .
In a statement toBloomberg , Apple retell its 2017 stance , saying it “ was not about how much revenue enhancement we pay , but where we are command to pay it . ” It added that Apple had pay over $ 100 billion in corporate tax worldwide , and “ 10 of billions more in other taxes . ”
Do n’t experience too big for Ireland , though . The country has sided with Apple from the beginning , likely because it digs being a tax haven . In astatement , the Irish government said it was proud of with the ruling . “ Ireland has always been clear that there was no special treatment provided to the two Apple companies — ASI and AOE , ” the financial statement understand . “ The right amount of Irish tax was charge up in line with normal Irish tax income rules . ”
Obviously , the European Commission disagrees . European Commission Executive Vice - President Margrethe Vestager , who also spearheaded the 2016 decision , enounce in astatement , “ The Commission endure to the full behind the objective that all companies should pay their fair share of revenue enhancement . If Member States give certain multinational companies tax reward not useable to their rivals , this harm fairish rival in the EU . ”
pass away frontwards , Vestager say the EU will be considering its next step . It has 14 24-hour interval to appeal the determination to the EU ’s high court , the Court Justice of the European Union . So while Apple is belike celebrating its profits today , it could take a few more twelvemonth before there is an right-down final determination on the matter . Until then , that $ 15 billion willstay in the escrow fundApple set up .
This whole debacle has wide - reaching implication . Vestager also hasthree causa against Googletotaling roughly $ 9.4 billion , while Amazon is also appealing a 2017 ruling saying it owes Luxembourg roughly$300 million in back taxes . The result of those cases could touch on how giant technical school companies ( and non - tech multinationals ) are tax internationally . That said , Vestager alsolost a caselast year in which Starbucks was say to owe the Netherlands $ 33 million in back tax , stating that the Commission hadfailed to provethe coffee bean companionship had an unfair advantage . Based on the Starbucks opinion and today ’s Apple ruling , it would appear that the EU courtyard do n’t inevitably disagree with Vestager ’s movement against multinational tax dodgers — butit does careabout the Commission doing its preparation to prove its example .
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