Apple Ready to Challenge €13 Billion Tax Demand from European Union

Apple Ready to Challenge €13 Billion Tax Demand from European Union

Apple is ready to launch a legal action against European Union’s record €13 billion tax demand from Cupertino-based hardware and software major. Apple has been supported by Ireland where the company has based its European operations. Ireland has blamed Brussels of infringing on its sovereignty and has contested against massive tax demand from Apple.

The European Union slapped a penalty and tax demand on Apple while terming Apple’s tax arrangement with Ireland as illegal. Apple claimed that it was targeted as a convenient target by European Union authorities. Apple also claimed that the company is among the largest taxpayers in the United States, Ireland and across the world.

Apple further claimed that as its products and services are designed and created in the United States, the company pays most of its taxes in the United States. Apple informed that the company paid tax at a rate of 26 percent on its worldwide earnings.

The issue raised by European Union claimed that Apple paid less than one percent tax in Ireland. The standard corporate tax rate in Ireland is 12.5 percent. Apple has its headquarters for European market in Ireland. Ireland has been accused in the past as well, for offering convenient way of tax avoidance to multinationals.

The statement issued by Ireland’s finance ministry to the European Union said, "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. Ireland does not do deals with taxpayers."

President-Elect Donald Trump has said during his election rallies that his administration will reduce corporate and other taxes in the United States. This could mean that cash collected by U.S. corporations in other countries could start coming back to the United States, under low tax regime.

As per an analysis of corporate filings conducted in Reuters, “Apple's Irish tax arrangements have allowed it to pay tax at a rate of 3.8 percent on $200 billion of overseas profits over the past 10 years.”

The report published by Reuters further informed, “Ireland’s tax treatments, now amended, have allowed Apple to avoid tax on tens of billions of dollars of non-U.S. profit. Lawyers have previously said it was impossible to predict how EU courts will rule in an area that has not been tested before.”

The tax battle between Apple and the European Union would continue in future as Ireland has come forward to support Apple in this case. If European Union manages to remain strong on its stand, it could also mean tax issues for other multinational companies headquartered in Ireland.


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