EU Ireland Apple ruling infographic 001

Following news earlier this week that the European Commission had ruled that Apple must pay €13 billion ($14.5 billion) in back taxes to the government of Ireland because its sweetheart deal with Dublin that lets it be subjected to a lower tax rate constitutes “illegal state aid,” the Irish government said today it would join Apple in its fight against the ruling.

“Paradoxically, Ireland is determined not to accept the tax windfall, which would be equivalent to what it spent last year on funding its struggling health service,” says the report.

Ireland fears that collecting back taxes from Apple would equal an admission of guilt, which in turn might discourage investors from creating new jobs in the country. The country’s decades-old low corporate tax policy has drawn in multinationals like Apple, helping create one in 10 jobs in the country.

Ireland’s Finance Minister Michael Noonan said the EU’s retroactive ruling was “little short of bizarre and outrageous”.

“How could any foreign direct investor come into Europe if they thought the valid arrangements they made under law could be overturned a generation later and they be liable to pay back money?”, he asked at a press conference Friday.

His colleague, Public Expenditure Minister Paschal Donohoe, told the media that Ireland stood behind its corporate tax regime as a means of creating jobs.

“This ruling has seismic and entirely negative consequences for job creation in the future,” he said.

Transport Minister Shane Ross also defended Apple.

“I think they were acting legally,” he said. “What they were doing was making use of extraordinary loopholes that existed there. Multinationals provide absolutely vital jobs to the economy… (but) multinationals should pay a fair rate of tax in Ireland.”

Irish government has about two months to lodge an appeal to the EU’s General Court. If that fails, Dublin will take the case all the way up to the European Court of Justice.

The Commission’s ruling has also ticked off Washington.

The U.S. government’s position is basically that the EU is attempting to collect tax revenue that should go to Uncle Sam. President Barack Obama will raise the tax avoidance issue at a summit of the G20 leading economies in China this weekend.

Apple CEO Tim Cook called EU’s tax bill from hell “total political crap,” insisting in an interview with the Irish news publication Independent that “no one did anything wrong here”. Part of Apple’s tax bill would be paid next year when Apple repatriates some of its offshore profits to the United States, he said.

And in his “Message to the Apple Community in Europe,” Cook expressed confidence that the tax bill will be eventually reversed and said Apple would appeal the ruling.

Source: Reuters

  • nova voter

    first off, I believe the ruling was against Ireland, not against Apple. Apple was merely unjustly enriched by Ireland’s illegal deal. So I don’t think anyone is saying Apple themselves acted illegally.

    Second, as noted above, Apple was unjustly enriched by an illegal act. In that case, it’s not out if the ordinary to demand disgorgement of the profits they otherwise would not have made — it’s akin to the concept of a relief defendant in US courts.

    Sucks for Apple, but the arguments being advanced by Ireland are specious — “it’s going to threaten future business if companies can’t rely on sweetheart deals that violate EU laws/regulations.” Come on. No, it’s going to encourage companies with hundreds of billions of dollars to do due diligence on deals/contracts/arrangements they make, to make sure they are in compliance with applicable laws.

    According to the ruling, it’s money they otherwise wouldn’t have had, so it’s not a punishment — it’s disgorgement of ill-gotten gains, putting them in the position they otherwise would have been in had the deal complied with applicable laws/regulations.

    • lemonhead

      my thoughts exactly…

      Fun fact: if you’re an american and live in Europe you still have to pay taxes to the US as well…

      • Posi X. Mosh

        Fun fact, that statement is disingenuous.

      • lemonhead

        take it or leave it, I guess.

      • Posi X. Mosh

        You don’t have to pay income tax twice if you live abroad.

  • n0ahcruz3

    It’s funny when Tim cook said “total political crap”

    • Rowan09

      When it deals with taxes it’s always something funny. For example I’m natively from Jamaica and if I make any money from a business there after paying them taxes the American government wants me to claim it as income to be taxed again.

  • Xee

    A mostly one sided pro-Apple article. Not very objective. Except for the bit about the Irish Government being in the wrong, but Apple were part of that deal to don’t forget.

    Plus the US Government wants to steal tax paid by European customers. Are they freaking mad?! US Gov can go f-off!!

  • Xee

    Lame deleting posts that are truthful…

    • Kroffy

      Wow, agree. I doubted the fact they were deleting comments was true but I just witnessed yours. I’ve nothing to do on a website ruled by blind and one-sided people.

      • Impreza

        If you knew how many comments were deleted on this blog site you’d think it was run by a tyrant. If you dont want to be deleted, dont mention a certain somebody who used to work here but got replaced by somebody who cant make a video and has a nauseating introduction and sound. (Probably explains the lack of videos)

      • Barry Murphy

        who? who left idownload blog, I noticed its no where near as good now but I didn’t know they left! do you know where they post now so I can use that site? this idownload just after money these days with their deals that are usually 3 times the price of anywhere else ha ah ah but seriously who left! and I agree, I see loads of comments getting deleted, sure that’s why most people I know use 9 to 5 mac now rather than this site! also they never share JB news anymore, only the odd bit everyone already knows

      • Xee

        Anyone would struggle for a while to fill his shoes, he was a legend. Anyway new guy is getting better all the time. Just takes time guys, plus jail breaking ain’t exactly full swing just now.

      • Xee

        Well it’s not my site it’s theirs and they decide what can stay. I will just state the facts as I see it rather then attacking the article as well.

    • Barry Murphy

      yeah so much for freedom of speech! does not apply here! when I put the truth up they always delete it!

  • Posi X. Mosh

    The “lower state aid” tax rate is under a percent. This is evading taxes in my book. But that’s sorta par for the course for big multi-national corporations these days.
    Sorry, but, why is anyone ok with this? Do these companies think that roads and schools build
    themselves? And if Apple or anyone else is profitable enough to have a 13 billion dollar tax bill @ 20% percent of profit, maybe they could pay the employees that made this profit a bit more…

  • Barry Murphy

    Apple does not create one in ten jobs here in Ireland ha ha! they employ almost no one here, We don’t have an Apple Store here in Ireland! the ones who created most jobs was PayPal
    the closest ones in Belfast in the UK, In Ireland we hate apple as an employer as they don’t employ anyone only a few to work in an office in cork to help em commit fraud!
    Your completely wrong with your story! also the ruling is agents Apple not Ireland, Ireland actually would love to have the 13bn, Apple want to fight it! all our news is saying how apple said they wont pay and that their appealing it! yous yanks are so brainwashed its crazy! yous don’t even get the real news, its all censored! we get the truth, and we know its kept from yous as they always say, but the American news outlets are telling their people X Y and Z yet the truth is…. its hilarious how stupid and under control yous are!!

    • Xee

      Plus the US Gov wants its greedy mitts on EU tax money… hence why they are unhappy at the EU rightfully claiming tax due from Apple.

    • Docservlet

      They employ 6000 people directly and who knows how many indirectly. They’ve been in Cork for over 30 years.

      If the EU ruling stands, which it won’t, Ireland stands to lose a lot more than 13 billion.

  • Posi X. Mosh

    Looks like you forgot the rest of the paragraph…
    ” However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts.”
    Or the rest of the page with links full of loopholes (for individuals).
    If we are talking businesses, you do not need to pay income tax or tax on profit until you try and import the cash or assets.