Brussels interfered with Ireland’s tax sovereignty by ordering Apple to pay €13 billion in taxes to the Exchequer, which has surely angered Ireland. In a stinging rebuke to the European Commission, the country’s Finance Department slammed the decision, saying that Brussels has exceeded its powers, according to Independent.ie.
Commission exceeding its powers
In legal arguments made public today, the government said, “The commission has exceeded its powers and interfered with national tax sovereignty. Ireland did not give favorable tax treatment to Apple. The full amount of tax was paid in this case and no State aid was provided. Ireland does not do deals with taxpayers.”
According to the government, the commission has made an attempt to re-write Irish corporate tax rules through its decision to levy the tax on the U.S. firm. The Irish government and Apple are appealing the decision.
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In 1980, the U.S. firm opened its European base of operations in Cork, but it did not get any sweetheart tax deals then, Finance Minister Michael Noonan insisted. Apple has been denying the existence of any such arrangements being in place, either presently or in the past.
The government has told the commission that two Apple units with bases in Ireland “did not pay any less tax than was properly due” under relevant legislation.
Apple also appealing the decision
The European Commission formally started its Apple probe in 2014. In August, Brussels accused the Irish government of allow the U.S. firm to pay substantially less tax than other businesses.
Apple plans to tell the court that the commission’s ruling that the head office of its Irish-registered units, Apple Sales International (ASI) and Apple Operations Europe, existed only on paper is erroneous. Just because an entity was a holding company with no employees on its books did not mean that it was inactive, said General Counsel Bruce Sewell.
“So when Tim Cook, who is the CEO of our company, makes decisions that impact ASI, the Commission says we don’t care because he is not an ASI employee, he is an Apple Inc employee. But to say that somehow Tim Cook can’t make decisions for ASI is a complete mis-statement of corporate law, it’s a misunderstanding of how corporations operate,” he said.
Though it will take several years for the resolution of the case, the iPhone maker will still need to pay the €13 billion, which will be held in a secure account until a definitive ruling is reached, notes Independent.ie.