Irish cabinet votes to appeal EU's $14.5B tax penalty on Apple
Apple's appeal of the European Commission's $14.5 billion charge in back taxes will be aided by Ireland's cabinet, who voted on Friday to endorse the legal challenge.
With approval from Ireland's cabinet, the republic's parliament will vote to support Apple and the nation's tax policies next week, according to Reuters. The result was expected but not guaranteed --?independents on the cabinet did not back the move.
Still, Apple has the support of Irish Finance Minister Michael Noonan and opposition party Fianna Fail. As a result, it's expected that Apple will easily win the support of parliament.
The European Commission, which is the legislative arm of the European Union, announced on Tuesday that it was levying a 13-billion-euro charge ($14.5 billion U.S.) against Apple for what it believes are unpaid back taxes. The Commission declared that tax rates on European profits were illegally low at 0.005 percent in 2014, and 1 percent in 2013.
Apple has already vowed to appeal the ruling, and has expressed confidence that the decision will be reversed. That process could take considerable time, however --?IBM just concluded a 7-year dispute with Japanese tax authorities, for example.
Regardless of how it plays out, Apple has more than enough cash on hand to pay the EU's tax bill. As of the end of last quarter, the company reported some $231 billion in cash, most of it held outside of the U.S.
With approval from Ireland's cabinet, the republic's parliament will vote to support Apple and the nation's tax policies next week, according to Reuters. The result was expected but not guaranteed --?independents on the cabinet did not back the move.
Still, Apple has the support of Irish Finance Minister Michael Noonan and opposition party Fianna Fail. As a result, it's expected that Apple will easily win the support of parliament.
The European Commission, which is the legislative arm of the European Union, announced on Tuesday that it was levying a 13-billion-euro charge ($14.5 billion U.S.) against Apple for what it believes are unpaid back taxes. The Commission declared that tax rates on European profits were illegally low at 0.005 percent in 2014, and 1 percent in 2013.
Apple has already vowed to appeal the ruling, and has expressed confidence that the decision will be reversed. That process could take considerable time, however --?IBM just concluded a 7-year dispute with Japanese tax authorities, for example.
Regardless of how it plays out, Apple has more than enough cash on hand to pay the EU's tax bill. As of the end of last quarter, the company reported some $231 billion in cash, most of it held outside of the U.S.
Comments
No, this is not what the EC declared, what the EC declared illegal is the deal between the Irish Government and Apple for the way the amount of taxable profits in Ireland were calculated for Apple Sales International.
The rate applied was 12.5%, The problem has never been with the tax rates in Ireland, or the tax rates in Belgium in the latest analog ruling
It's believed this move by the EU is a first political move to attempt to force it's will of equalized rates across all countries that are part of the EU.. I have a feeling that, while people are poo poo'ing Apple, that soon other countries will soon (Netherlands for example) be in the EU's sights and things will heat up even more.
The irony is; Tim Cook is completely disputing the low rates they claim. Example is Apple says they paid Ireland $400 million (5%) in taxes in 2014; which completely contradicts EU's contention that Apple only paid a $4-5 million (.005%) ... I'm VERY interested in seeing where the EU is getting their low numbers from..
Sadly, the damage has been done already. Had te commission simply declared that no tax aid can be given (in the future) this all could have been avoided. In that respect I think what Steve Cook has said makes sense. Simply Pro-europeanism.
Good apple is putting money aside to deal with their crap.
The you should read the Press Release and the ruling.
And the EC has never said that Apple has paid an effective rate of 0.005%
I have little idea how much Apple has paid in taxes, but I know the taxes system of Ireland has been in place ever since Apple set up shop over 30 years ago. I read about it when Jobs first came back.
The rate was designed to attract foreign investment, desperately needed in Ireland. Many companies took advantage of the tax laws, and no special deal was set up just for Apple.
It simply is unfair for the EU to 30 + years later claim Apple has been under paying when it has known for that long Ireland's tax rate and how much companies like Apple paid. This isn't a recent revelation.
Further, if Ireland set an illegal rate, Ireland should eat the cost not a company following the law.
Moreover, the fight isn't really about the taxes, it is about who gets to collect them. Apple's view is the US is the proper taxing entity.
The instability this precedent sets will destabilize European investment and costs will be passed on to consumers.
This will validate Britain's decision to leave the EU.
I think companies like Apple should pay more taxes, but not retroactively. Governments should clarify the tax laws.
Worth a read, especially if you live, or do business, in the EU.
To clarify, I live in the United States and pay all the taxes that I legally owe, no more, no less. Just as Apple has done in Ireland. However I'll be visiting the UK later this month...please advise on the tax code so that I will be prepared when I get there.
How many times must be said that the tax rates of Ireland are not the problem?