Appeals against EU’s tax ruling take shape
Ireland’s Department of Finance publishes the arguments it intends to make against the ruling.
Apple has filed its appeal of a European Commission decision that it owes Ireland billions in back taxes, while the country’s Department of Finance has revealed details of its own appeal.
European Commissioner for Competition Margrethe Vestager said on 30 August that Apple must pay up to €13 billion (£11.1bn) in back taxes, plus interest, because opinions given by the Irish tax authorities in 1991 and 2007 constituted illegal state aid. Her decision concluded a two-
year investigation of the company’s tax affairs stretching back to 2003.
Apple CEO Tim Cook dismissed Vestager’s ruling as “total political crap” in an interview with the Irish Independent newspaper on 2 September, and announced the company’s intention to appeal.
Apple is now ready to file that appeal with the General Court, the EU’s second highest court, the company’s General Counsel Bruce Sewell and Chief Financial Officer Luca Maestri told Reuters.
The Irish government decided to appeal the ruling alongside Apple, and the country’s Department of Finance has published an outline of its arguments, saying the Commission misunderstood the relevant facts and Irish law.
It claims that the Commission is wrong to claim that the 1991 and 2007 tax opinions ‘renounced’ tax revenue to which the country would otherwise have been entitled. Instead, the department’s argument goes, the opinions correctly applied Irish tax law in only taxing the profit attributable to Apple’s Irish branch, and not the company’s non-Irish profits.
The case presented by the Commission revolves around the activities of the Irish branches of Apple Sales International (ASI) and Apple Operations Europe (AOE). According to the department, these branches carried out routine functions but all important decisions were made in the US, so profit deriving from those decisions should not be attributed to ASI and AOE. Furthermore, it said, the Commission tried to apply principles that don’t exist in Irish tax law, failed to follow required procedures, wrongly invoked novel legal rules, and exceeded its powers and interfered with Irish sovereignty.