Apple appeals EU tax ruling
Says it is ‘convenient target’ that generates headlines
CUPERTINO, California/ BRUSSELS (Reuters) – Apple has launched a legal challenge to a record $14 billion EU tax demand, arguing that EU regulators ignored tax experts and corporate law and deliberately picked a method to maximize the penalty, senior executives said.
Apple’s combative stand underlines its anger with the European Commission, which said on August 30 the company’s Irish tax deal was illegal state aid and ordered it to repay up to €13b. ($13.8b.) to Ireland, where Apple has its European headquarters.
European Competition Commissioner Margrethe Vestager, a former Danish economy minister, said Apple’s Irish tax bill implied a tax rate of 0.005% in 2014.
General Counsel Bruce Sewell and Chief Financial Officer Luca Maestri outlined in an interview with Reuters at Apple’s global headquarters in Cupertino the company’s plans for its appeal against the commission’s ruling at Europe’s second highest court.
The iPhone and iPad maker was singled out because of its success, Sewell said.
“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 to Vestager by Danish newspaper Berlingske last month.
Apple will tell judges the commission was not diligent in its investigation because it disregarded tax experts brought in by Irish authorities.
“Now the Irish have 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 said.
The European Commission accused Ireland in 2014 of dodging international tax rules by letting Apple shelter profits worth tens of billions of dollars from tax collectors in return for maintaining jobs. Apple and Ireland denied the accusation.
On Monday the commission published the detailed version of its decision which may provide clues as to how the commission will deal with similar tax cases in future.
It cited, for example, notes of a meeting in 1990 between Apple’s tax adviser and the Irish revenue service discussing an appropriate level of profits Apple’s Irish unit would pay tax on – Apple’s adviser suggesting a ceiling of $30-40 million.
“[Apple’s tax adviser] confessed there was no scientific basis for the figure. However the figure was of such magnitude that he hoped it would be seen to be a bona-fide proposal,” the excerpt read.