Apple says EU exaggerates the importance of Ireland to its business

Apple's Irish headquarters

Apple continues to argue its appeal against the European Commission's $14.4 billion tax ruling, saying that the order was based on the erroneous idea that Ireland is key to Apple's strategic planning.

In a second day at the European Union General Court, Apple is continuing its appeal against a prior tax order, and concentrates on what it says is the erroneous basis for that judgement. The order required Apple to pay $14.4 billion in back taxes to Ireland, even though that country negotiated its tax rate with the company and is in court supporting Apple.

According to Reuters, Apple lawyer Daniel Beard continues to argue that Apple's business in Ireland is not significant.

Referring to Tim Cook's 2013 testimony on the matter in the US Senate, Beard acknowledged that Ireland was important, but said the EU was overestimating its significance.

"Yes, Apple CEO Tim Cook said there were decisions taken in Ireland," he said, "but not strategic decisions."

Beard and the legal team from Apple also criticized the European Commission for having refused Apple's offer to visit the company's operations in Ireland.

However, Paul-John Lowenthal, lawyer for the Commission rejected the claim. "What would a site visit accomplish?" he asked.

The European Union General Court is the second-highest authority in Europe, which means that whichever side loses this current appeal, the other is likely to take on to the EU Court of Justice.

Consequently, no final judgement is expected for some years, but it's also not the only similar case under review. European Competition Commissioner Margrethe Vestager has also targeted other multinational corporations such as Starbucks and Amazon.

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14 Comments

nadriel

said about 4 years ago

I wonder what apple means that Ireland is not important in strategic planning? Financially the location, location over all or in corporate operations?

There must’ve been a huge incentive over usual hubs in Europe that Google too decided to locate their HQs in Europe to Ireland, Ireland isn’t really in the middle of action. But I hope that if this all along has been a tax haven loophole it gets closed, all profit in unpaid taxes get repaid.

As the article said, we’ll see in a couple of years what is the verdict, but currently doesn’t look like good practice has been followed.

hydrogen

said about 4 years ago

I would have thought Apple lawyers to be more astute than this .....

gatorguy

said about 4 years ago

IMO this is a ridiculous argument. Arguing that Ireland isn't important at the same time they move revenue's from across the EU and Asia into accounts controlled by their Irish subsidiaries seems $200B+ disingenuous. It could well come back to bite them as individual countries investigate big tech tax avoidance issues, something France is currently doing.

randominternetperson

said about 4 years ago

gatorguy said:

IMO this is a ridiculous argument. Arguing that Ireland isn't important at the same time they move revenue's from across the EU and Asia into accounts controlled by their Irish subsidiaries seems $200B+ disingenuous. It could well come back to bite them as individual countries investigate big tech tax avoidance issues, something France is currently doing.

Here's the following 2 paragraphs from the Reuters' article (which explains why Apple was making this point):

Apple did not do a special Irish tax deal in return for creating jobs, Beard added.

“The Commission went out of its way to tell a fairy story about supposed benefits to employment. It has no evidence, it is wrong. There was no sense of any special deal. Ireland properly and correctly taxed the Irish branches. There was no derogation from the normal rules,” he said in his closing argument.

gatorguy

said about 4 years ago

randominternetperson said:

gatorguy said:

IMO this is a ridiculous argument. Arguing that Ireland isn't important at the same time they move revenue's from across the EU and Asia into accounts controlled by their Irish subsidiaries seems $200B+ disingenuous. It could well come back to bite them as individual countries investigate big tech tax avoidance issues, something France is currently doing.

Here's the following 2 paragraphs from the Reuters' article (which explains why Apple was making this point):

Apple did not do a special Irish tax deal in return for creating jobs, Beard added.

“The Commission went out of its way to tell a fairy story about supposed benefits to employment. It has no evidence, it is wrong. There was no sense of any special deal. Ireland properly and correctly taxed the Irish branches. There was no derogation from the normal rules,” he said in his closing argument.

Ah, thanks for that.

So more a sideshow argument while avoiding reference to Apple's lightly-to-not-at-all-taxed subsidiaries who had nothing directly to do with minimal manufacturing of some Macs.

IMO the reason Apple has their only Apple-owned manufacturing plant in the world located in Cork is to use it as Irish tax shelter support for their worldwide profits. Without the tax avoidance made possible by the cost+ tax bill Apple arranged for manufacturing the 2 Irish financial subsidiaries would not have had cover.