Apple Set to Appeal EU Tax Ruling This Week

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Apple is set to appeal this week against the European Commission's ruling that it must pay up to 13 billion euros ($13.8 billion) to Ireland in back taxes (via Reuters).

EU regulators concluded in August that Apple had received undue tax benefits from Ireland - where the company's European headquarters are located - which allowed it to pay substantially less than other companies.

Apple CEO Tim Cook vowed to appeal the ruling at the time, calling the back tax calculation a "false number" and the EU's judgement "total political crap". The Irish government also rejected the conclusion and said it would fight to reverse it.

On Monday, Apple's General Counsel Bruce Sewell told Reuters that the company's imminent legal challenge will be based on its belief that EU regulators willfully ignored tax experts to come to its conclusions.
"The Irish put in an expert opinion from an incredibly well-respected Irish tax lawyer. The Commission not only didn't attack that - didn't argue with it, as far as we know - they probably didn't even read it. Because there is no reference (in the EU decision) whatsoever."
Sewell also said Apple intends to challenge the EU's basis for its penalty judgement, and will argue that a "crazy notion of non-residency" was chosen on purpose to produce a punitive amount, when other legitimate tax law arguments could have been used that would "produce much lower numbers". As to why the EU had gone down its chosen route, Sewell said he believed regulators had singled out the company because of its success.
"Apple is not an outlier in any sense that matters to the law. Apple is a convenient target because it generates lots of headlines. It allows the commissioner to become Dane of the year for 2016," he said, referring to the title accorded by Danish newspaper Berlingske last month.
Ireland also issued a statement on Monday, saying that the EU commission had "misunderstood the relevant facts and Irish law".
"Ireland did not give favourable tax treatment to Apple - the full amount of tax was paid in this case and no state aid was provided," it said. "Ireland does not do deals with taxpayers."
In addition, Apple says it plans to tell the court that the Commission erred when it ruled that Ireland-based Apple Sales International (ASI) and Apple Operations Europe existed only on paper, with no justification for the billions of euros it posted in untaxed profits. Sewell said that just because a holding company has no employees on its books doesn't mean it is inactive, since it could be actively managed by employees of its parent company:
"When Tim Cook, who is the CEO of our company, makes decisions that impact ASI, the Commission says we don't care because he is not an ASI employee, he is an Apple Inc employee. But to say that somehow Tim Cook can't make decisions for ASI is a complete mis-statement of corporate law, it's a misunderstanding of how corporations operate."
The strongly worded statements from Apple and the Irish government form a two-pronged attack on the European Commission as it readies a more detailed version of its ruling for publication before the court case begins.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: Apple Set to Appeal EU Tax Ruling This Week
 
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scottishwildcat

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Oct 24, 2007
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Drop the prices of apple products in EU and I might have some sympathy ....otherwise pay up, I have to :)
They pay everything the Irish Government wants them to. I'm an Irish tax payer, and I also pay everything the Irish Government wants me to. And I'm quite happy that businesses get massive tax breaks here, because the foreign investment it brings means most people have a decent enough standard of living, and a choice of jobs when the need arises.
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Forgive me for my ignorance, but whenever I see this story I can't help but think... if found "guilty" wasn't it Ireland who broke the law?
That's the problem -- it's very questionable whether any "laws" were broken here, or whether the EU have the power to interfere with Ireland's internal tax affairs at all.
 

bob24

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Sep 25, 2012
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Forgive me for my ignorance, but whenever I see this story I can't help but think... if found "guilty" wasn't it Ireland who broke the law?
It is a bit of both really. They are disputing this, but as far as the EC is concerned Ireland and Apple have worked together to design and approve a specific tax arrangement which helped Apple work around EU legislation.

The legal responsibility for approving the tax scheme is with Ireland, but it still has consequence for Apple as since the scheme is now considered illegal by the EC it means Apple was not paying its due share of tax and now has to pay the arrears (to the Irish government initially, but other countries might go after Ireland to get a cut of that payment if they can prove that part of it should have been paid elsewhere, as most of that taxable profit is for sales actually made elsewhere in the EU but booked in Ireland).
 
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MH01

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Feb 11, 2008
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They pay everything the Irish Government wants them to. I'm an Irish tax payer, and I also pay everything the Irish Government wants me to. And I'm quite happy that businesses get massive tax breaks here, because the foreign investment it brings means most people have a decent enough standard of living, and a choice of jobs when the need arises.
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That's the problem -- it's very questionable whether any "laws" were broken here, or whether the EU have the power to interfere with Ireland's internal tax affairs at all.
Guess my issue is that Apple increases prices % wise at a much higher rate then they pay tax ;) Im really happy for them to pay the same tax and keep the prices the same in the EU......but when my top spec cost £4000+ thats taking the piss......
 

The Mercurian

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Mar 17, 2012
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That's the problem -- it's very questionable whether any "laws" were broken here, or whether the EU have the power to interfere with Ireland's internal tax affairs at all.
It all boils down to 2 "tax treatments" between Apple & Revenue. These occurred when Apple went to the Revenue and says "here is out situation, what do we owe you?". However what is discussed at that meeting is kept secret. All we know is Revenue allowed them to pay an effective tax rate of 0.05%. Now if your neighbour got that deal - would you conisder fair that you still ahve to pay 40% or whatever it is ? What if you were a European competitor to Apple, without operations outsideof Europe to take advantage of and so have to pay full tax. How is that a fair market ?


Again the problem is then with Irish government, not with Apple.
Half agree with you. Its the company and government together since these things were discussed behind close doors between them both and ongoing are still secret.


Thankfully repatriation is finally going to happen and the EU can go pound sand(if China hasn't stolen all of it yet).
Hahaha. Just because you decide to tax them in America does not mean they don't have to pay tax in Europe also
 
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mwd25

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Sep 24, 2012
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Drop the prices of apple products in EU and I might have some sympathy ....otherwise pay up, I have to :)
As Apple books its sales in dollars, when currencies fall against the US currency it leads to a price rise in many countries. Then you have different sales tax etc. I have to pay more in the U.S. for Toblerone then the E.U. Thats life.

I'm wondering, who decides the appeal in this case? Does the same commission that made this ruling also rule on the appeal? Doesnt seem likely they would reverse their own ruling.
 

bob24

macrumors 6502
Sep 25, 2012
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Again the problem is then with Irish government, not with Apple.
Apple very much seems to think it is its problem as well ... and rightly so.

It is not just a legal problem either. These tax schemes have became completely unacceptable to a large part of the European population. Apple has the means to legally fight this to the bitter end and possibly win. But in the mean time they will be destroying their image in Europe.

It would also be naive to think no other companies are coming next. Google or Facebook will be in a similar position at some point. This is not just one legal case but a change of public opinions and directions in Europe and even if these companies score legal victories they will hurt themselves in the long term if they don't take that into account.
 
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