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 — Â 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 — Â 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.

56 Comments

gwydion 1083 comments · 16 Years

About 8 years ago

The Commission declared that tax rates on European profits were illegally low at 0.005 percent in 2014, and 1 percent in 2013

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

adrayven 460 comments · 12 Years

About 8 years ago

Just because I have $1000 in the bank, doesn't mean I want to pay someone $10 just because it would be a hassle to fight it. The logic that because Apple has a lot of money on hand they should just pay it is asinine.

adrayven 460 comments · 12 Years

About 8 years ago

gwydion said:

The Commission declared that tax rates on European profits were illegally low at 0.005 percent in 2014, and 1 percent in 2013

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

Incorrect.. The commission never proved their was a 'special' deal.. They only claimed it based on the 'low rates' in those years.. Their case is truly based on the low rates.. Which is why Ireland is largely fighting it, saying EU shouldn't be able to set their rates.

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..

franklinjackcon 612 comments · 10 Years

About 8 years ago

adrayven said:

Just because I have $1000 in the bank, doesn't mean I want to pay someone $10 just because it would be a hassle to fight it. The logic that because Apple has a lot of money on hand they should just pay it is asinine.

I don't think anyone is arguing that are they? Those saying Apple should pay up, at least think it's ethical for Apple to pay taxes or even illegal not to.

krawall 163 comments · 12 Years

About 8 years ago

It's a touch early. The European Weltverbesserer will come to to this thread soon enough to tell you why Apple is wrong and every cent has to be paid.

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.