Ireland says the European Union overstepped its authority and misinterpreted the country’s laws when it ordered the country to claim 13 billion euros ($13.59 billion) in allegedly unpaid taxes from Apple. The company will also reportedly dispute this figure later this week. It’s by far the highest tax bill chased by the EU, and is one of multiple cases it’s pursuing against corporate tax deals granted by EU countries. The commission says that lower tax bills create illegal “state aid”, giving firms advantages over rivals.
Ireland’s appeal to overturn the decision by the European Commission centers on the fact that rulings “did not depart from ‘normal’ taxation”. It says it followed a portion of the Irish tax code that said nonresident companies should not pay income tax on profit that isn’t generated in Ireland.
Apple says that the majority of profits from the two Irish-registered businesses at the center of the case were based on intellectual property developed in the US, meaning it shouldn’t be taxable in Ireland Apple will have to pay its tax bill in the next few weeks. However, the money will be held until a final ruling from the EU courts — which could take years.
Ireland adds that the Commission is “attempt(ing to) rewrite the Irish corporation tax rules.” The country has pretty good motives to continue offering tax incentives. Dublin houses (or has housed) European HQs for Microsoft, Google, Facebook, Twitter, LinkedIn, Amazon, PayPal, AirBnB, Uber and many more. If the EU gets its way, it could well affect Ireland’s status as European tech hub.
