Apple & Ireland's appeal of $16B EU tax ruling expected this fall, payments expected to start in May

Apple and the Irish government's appeal of a $16 billion European Commission ruling on back taxes should finally see action later this year, according to Ireland's finance minister.

The case is likely to be heard in the fall, said Paschal Donohoe on Tuesday, quoted by Reuters. The minister didn't offer a precise date, or what legal strategy Ireland might adopt.

Apple is expected to start paying into the escrow fund in May, according to Politico. The Irish finance ministry said that it agreed on a "significant milestone" on Tuesday towards collecting the money, with the full amount expected by the end of the third calendar quarter of 2018.

In August 2016, the European Commission ordered Ireland to collect billions in back taxes, arguing that the country had extended preferential tax treatment to Apple. Under E.U. law, benefits offered to one company must be available to others — otherwise, it can constitute illegal state aid.

Apple has funneled large sums of international revenue through Ireland, using loopholes to pay minimal taxes. According to the Commission, Apple paid 1 percent on profits in 2003, and as little as 0.005 percent in 2014. The Irish government is even accused of reverse-engineering rules on the fly to ensure Apple got favorable rates, presumably worried that the company would divert jobs and investments without white glove treatment.

In testimony and elsewhere Apple and Ireland have denied any wrongdoing, claiming they followed all applicable laws. Nevertheless the latter has begun closing some loopholes, and the Commission has proposed new tax rules that would scatter Apple's payments around the E.U.

Some critics have accused Apple of violating the spirit of the law, and/or depriving government services of badly-needed revenue. In France the company has been met with repeated protests along those lines.

10 Comments

indieshack 336 comments · 9 Years

About 6 years ago

$16 billion - uhm - yes, that’s worth appealing

rob53 3307 comments · 13 Years

Some critics have accused Apple of violating the spirit of the law, and/or depriving government services of badly-needed revenue. In France the company has been met with repeated protests along those lines.

In other words, the EU countries continue to demand foreign aid from the US, this time directly from a US-based company. Sounds normal to me.

xbit 399 comments · 9 Years

rob53 said:

In other words, the EU countries continue to demand foreign aid from the US, this time directly from a US-based company. Sounds normal to me.

In other words, a US company has taken advantage of EU infrastructure and resources without paying its fair (according to the law and backed in several courts) amount of tax to each EU nation. The EU are seeking to end this corporate welfare scam.

stuke 123 comments · 15 Years

Of course ANY company will take advantage of tax breaks. Their a company first...to make money. Welfare to the state is defined BY THE STATE (government body) and if it had rules to which Apple effectively had to pay its taxes at 0.005% in 2014, then that’s what Apple did.

Do you opt to pay more than what the rules tell you in your personal taxes, in the name of welfare to the State?

xbit said:

rob53 said:

In other words, the EU countries continue to demand foreign aid from the US, this time directly from a US-based company. Sounds normal to me.

In other words, a US company has taken advantage of EU infrastructure and resources without paying its fair (according to the law and backed in several courts) amount of tax to each EU nation. The EU are seeking to end this corporate welfare scam.

We only have information on how much tax Apple paid as determined by the EU. I don't remember ever seeing any tax information from Ireland. The articles I've read all point to the EU commission as trying to force Apple to pay taxes on previous sales after altering the tax laws (or even bothering to apply it). If anyone is at fault, it's Ireland since they set the tax rate for Apple, which Apple has paid.

As for giving preferential tax treatment, that's common in the US and is probably common throughout the EU. It doesn't matter if it's for a US company or foreign owned. Ireland gave Apple better tax rates along with any other large company that asked for them. The EU is going broke and is mismanaged so they're simply trying to find ways to collect from whoever they can.