Apple's $15 Billion Tax Battle Resumes in Europe -- 3rd Update
September 25 2020 - 8:23AM
Dow Jones News
By Valentina Pop
BRUSSELS -- Apple Inc.'s legal battle in Europe over a $15.2
billion tax bill will continue, potentially for years, after the
European Union appealed a court ruling that sided with the tech
giant.
EU officials doubled down Friday on their ruling from 2016,
which alleged that Ireland had granted illegal tax breaks to Apple.
This followed the company's unexpected win in July at the bloc's
second-highest court, where judges said the European Commission --
the EU's competition enforcement arm -- didn't bring enough
evidence that Ireland had granted illegal tax breaks to Apple
between 2003 and 2014.
The commission's competition chief, Margrethe Vestager, said the
court had "made a number of errors," prompting the appeal. "Making
sure that all companies, big and small, pay their fair share of tax
remains a top priority for the commission," she said.
Apple said it would review the commission's appeal, adding that
the "facts have not changed" since the court's July decision.
The total sum of 14.3 billion euros, equivalent to $16.7
billion, which includes interest, will remain parked in escrow
until the European Court of Justice, the bloc's highest court,
renders its judgment.
The Apple case was the largest in a series of decisions that
used the EU's laws against selective state aid to companies to
annul preferential tax deals struck by multinational corporations,
notably in Ireland, Luxembourg and the Netherlands.
The case earned Ms. Vestager, the nickname "tax lady" from
President Trump. But July's ruling was a rebuke to Ms. Vestager,
who is leading the charge to rein in alleged abuses by Big Tech
with regards to both state aid and antitrust concerns.
With Friday's appeal, Ms. Vestager is seeking clarity on the
limits of competition law regarding taxation, which is a national
prerogative in the EU.
At issue is whether Irish tax rulings in 1991 and 2007 gave
Apple special treatment, or whether they just reiterated a
generally used interpretation of Irish law.
Those rulings allowed two Irish-registered Apple units to
attribute only a small sliver of $130 billion in profit to Ireland
over an 11-year period. The July ruling said that despite the gaps
in Ireland's tax rulings, the commission hadn't proven that the
country granted a special advantage to Apple that was unavailable
to other companies.
Irish Finance Minister Paschal Donohoe said the process could
take up to two years to complete. "Ireland has always been clear
that the correct amount of Irish tax was paid and that Ireland
provided no state aid to Apple," he said.
The commission's appeal comes at a crunchtime for international
talks on digital taxation, with the Organization for Economic
Cooperation and Development expected to table proposals in October
on how to tax digital companies across borders. Several countries,
including France, have introduced taxes at a national level. The EU
has said it would push for a bloc-wide tax if the global efforts
fail, after the Trump administration this summer said OECD talks
had reached an impasse.
Sam Schechner in Paris contributed to this article.
Write to Valentina Pop at valentina.pop@wsj.com
(END) Dow Jones Newswires
September 25, 2020 08:08 ET (12:08 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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