CNBC: EC ruling against Apple in Irish tax arrangement, recommending $1.1B in back ta

This is a discussion on CNBC: EC ruling against Apple in Irish tax arrangement, recommending $1.1B in back ta within the Uk Dedicated Apple forum forums, part of the Regional Apple Forums category; CNBC reports that the European Commission investigating Apple’s tax arrangement with Ireland is ruling against the Cupertino company and recommending that Apple pay over $1.1 ...

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    CNBC: EC ruling against Apple in Irish tax arrangement, recommending $1.1B in back ta




    CNBC reports that the European Commission investigating Apple’s tax arrangement with Ireland is ruling against the Cupertino company and recommending that Apple pay over $1.1 billion in back taxes.

    We wrote back in March that Apple was likely to lose its case as the tax arrangement with Ireland was likely to be declared illegal:

    But while the wheels of EU tax investigations may grind exceedingly slowly, I’d be willing to wager quite large sums of money on the final outcome. It looks to me increasingly clear that Apple’s tax arrangements with the Irish government are going to be declared illegal, and that Apple is going to be faced with a significant bill for unpaid tax …

    Read Ben Lovejoy’s overview of the arrangement here. For its part, Apple has insisted that its arrangement with Ireland is completely legal while using job creation numbers to make its case. Just last week we learned that Apple is set to create 1,000 new jobs in the country through a new expansion.

    As we await more details to surface, the reported recommendation that Apple pay just over $1.1 billion in back taxes seems low compared to what could have happened. Last week we shared that it was possible Apple could face up to $19 billion in back taxes, according to one analyst, while most estimated the bill could amount to $8 billion.


    Update: CNBC has new reporting on this breaking news:

    The European Commission will rule against Ireland’s tax dealings with Apple on Tuesday, two source familiar with the decision told Reuters, one of whom said Dublin would be told to recoup over 1 billion euros in back taxes.

    The Commission declined to comment on Monday.




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    8-29-16

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    Irish legislature invites Tim Cook, other Apple execs to hearing on $14.5B EU tax




    An Irish legislative committee is reportedly optimistic that Apple CEO Tim Cook will accept an invitation to attend a late January hearing, which will examine the European Commission's ruling that Ireland must collect $14.5 billion in back taxes from the iPhone maker.

    An invitation to Cook and other high-level Apple executives was sent out by the chairman of the Oireachtas Finance Committee, John McGuinness, the Irish Times said. Defending and explaining the ruling will be the European Union's Commissioner for Competition, Margrethe Vestager.

    After a lengthy investigation, the Commission concluded in September that Ireland offered preferential tax breaks to Apple, something constituting illegal state aid —under E.U. law, such breaks have to be offered to all companies equally. Similar decisions have been rendered against other countries and businesses.

    Both Apple and the Irish government are contesting the ruling. While the latter nominally stands to benefit, it's believed to be concerned about scaring away other multinational corporations, which could take jobs and other economic benefits with them. Apple has already vowed to stay in the country, and even expand its footprint.

    The company has insisted that it did nothing wrong and simply followed the law. It and other businesses have long used Ireland as a tax haven, however, exploiting loopholes to pay slim amounts on millions or billions in international revenue. At least some of those loopholes are now being closed.





    12-12-16

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    Apple Set to Appeal EU Tax Ruling This Week




    Apple is set to appeal this week against the European Commission's ruling that it must pay up to 13 billion euros ($13.8 billion) to Ireland in back taxes (via Reuters).

    EU regulators concluded in August that Apple had received undue tax benefits from Ireland – where the company's European headquarters are located – which allowed it to pay substantially less than other companies.

    Apple CEO Tim Cook vowed to appeal the ruling at the time, calling the back tax calculation a "false number" and the EU's judgement "total political crap". The Irish government also rejected the conclusion and said it would fight to reverse it.

    On Monday, Apple's General Counsel Bruce Sewell told Reuters that the company's imminent legal challenge will be based on its belief that EU regulators willfully ignored tax experts to come to its conclusions.

    "The Irish put in an expert opinion from an incredibly well-respected Irish tax lawyer. The Commission not only didn't attack that - didn't argue with it, as far as we know - they probably didn't even read it. Because there is no reference (in the EU decision) whatsoever."

    Sewell also said Apple intends to challenge the EU's basis for its penalty judgement, and will argue that a "crazy notion of non-residency" was chosen on purpose to produce a punitive amount, when other legitimate tax law arguments could have been used that would "produce much lower numbers". As to why the EU had gone down its chosen route, Sewell said he believed regulators had singled out the company because of its success.

    "Apple is not an outlier in any sense that matters to the law. Apple is a convenient target because it generates lots of headlines. It allows the commissioner to become Dane of the year for 2016," he said, referring to the title accorded by Danish newspaper Berlingske last month.

    Ireland also issued a statement on Monday, saying that the EU commission had "misunderstood the relevant facts and Irish law".

    "Ireland did not give favourable tax treatment to Apple - the full amount of tax was paid in this case and no state aid was provided," it said. "Ireland does not do deals with taxpayers."

    In addition, Apple says it plans to tell the court that the Commission erred when it ruled that Ireland-based Apple Sales International (ASI) and Apple Operations Europe existed only on paper, with no justification for the billions of euros it posted in untaxed profits. Sewell said that just because a holding company has no employees on its books doesn't mean it is inactive, since it could be actively managed by employees of its parent company:

    "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."

    The strongly worded statements from Apple and the Irish government form a two-pronged attack on the European Commission as it readies a more detailed version of its ruling for publication before the court case begins.





    12-19-16

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