October 4, 2016
In the end of August 2016 the financial world was bewildered with news that European Union imposes a fine on Apple Corporation. The amount of the fine is 13 billion Euros; it is the sum of European Commission tax claims for the benefit of Irish government. After the Antitrust Committee investigation, EC came to the conclusion that Ireland has provided the corporation with the undue and illegal tax benefits. Thus Apple had got unjustified tax bill with the artificially reduced tax amount. Margrethe Vestager, competition commissioner in EU, claimed it at Brussels briefing.
An average taxation rate in Ireland for the companies working in Europe is 12,5%. However, Apple’s rate varied from 0.005% to 1% in different years between 2003 and 2014. European Commission considers it illegal for the EU member states to grant tax benefits selectively, no matter whether the companies are registered in Europe or abroad.
The world’s largest tech company gave immediate reaction to the ruling. Apple Chief Executive published an open letter for the European clients on the Company’s official website. He accuses European Commission in the attempt to rewrite the Apple Corporation Business history in Europe. Not only Irish tax legislation was ignored, to his mind, but the whole international system of taxation was turned upside down.
He argues that by the EC ruling dated 30 August, the fact that Apple and Ireland’s government have special arrangements is neither evidenced in the documents nor confirmed with facts.
American corporation has never asked for any special tax benefits or received any special deals. More than that Dublin Government states that the obligations are paid to the country in full. The requirements of the EU to retroactively pay additional taxes are unprecedented and may have serious, wide-reaching implications in the future.
European Commission suggests that Ireland changes her tax legislation and this is a direct threat to sovereignty of EU member states over their own tax matters, as well as to the legal principles in Europe as a whole.
Ireland has declared the intention to appeal the ruling of the Commission and Apple will demand its cancellation as well. Tim Cook is sure the decision will be abolished.
The lawyers in financial matters consider the chances for success in this case rather high, because as the US Supreme Court judge John Sunderland said “The right of taxpayers to avoid taxes, using all means permitted by law can be challenged by no one. Everyone has the right to arrange his financial matters in such a way, that the consequent tax payments are minimized…”
GazetaRu, Russian newspaper, has already published the US Ministry of Finances opinion on the matter. They consider that European Commission’s actions threatening not only to foreign investments and business climate in Europe, but also to the relations between EU and America.