DUBLIN (AP) – Ireland will appeal the European Union’s landmark order to collect a record 13 billion euros ($14 billion) in taxes from Apple, the Irish Department of Finance announced Monday.
The Irish countermove comes nearly four months after EU competition authorities hit Apple with the back-tax bill based on its longtime reporting of European-wide profits through Ireland, which charges the American company only for sales on its own territory at Europe-low rates that in turn have been greatly reduced by the use of shell companies at home and abroad.
In its formal legal summary , the Department of Finance declares that is the whole point of Ireland’s sales pitch to foreign investors – and asserts it is perfectly legal to levy far less tax on profits than imposed by competitors. It accuses EU competition authorities of unfairness, exceeding their competence and authority, and seeking to breach Ireland’s sovereignty in national tax affairs.
The ruling unveiled Aug. 30 by EU Competition Commissioner Margrethe Vestager called on Apple to pay Ireland the 13 billion euros for gross underpayment of tax on profits across the European bloc from 2003 to 2014. Her report concluded that Cupertino, California-based Apple used two shell companies incorporated in Ireland to permit Apple to report its Europe-wide profits at effective rates well under 1 percent.
The EU judgment could have been even huger, because EU time limits meant the judgment could include potential tax infringements dating only from 2003, not all the way back to Apple’s original 1991 tax deal with Ireland. Still, Irish specialists in corporate tax estimate that the EU’s order, if enforced, actually would total 19 billion euros ($20 billion) because of compounding interest from delayed payment.