Apple hits back at Europe’s $14 billion back-tax penalty with 14-point appeal

While most of America was off for the Presidents’ Day holiday, at least a few folks in Apple’s legal department were busy filing an appeal to a back-tax ruling by the European Commission.

Apple filed the 14-point appeal to the EC’s decision in the European Court of Appeals on Monday. In August 2016, the EC ruled that Apple paid illegally low taxes on its operations in Ireland, and as a result, ordered the company to pay $14 billion in back taxes. The Commission claimed Apple paid tax rates as low as 0.005 percent in 2014, and that Ireland granted such allegedly illegal low rates in order to help Apple cut its tax bill as an incentive to keep its business presence in the country.

Apple’s European headquarters in Cork, Ireland, employs 4,000 people, with another 2,500 workers said to be employed indirectly in the surrounding area.

Needless to say, Apple doesn’t want to pay back $14 billion. And who could blame them? Even for a company that prints money like Apple, $14 billion is a pretty big check to write. In fact, $14 billion is just shy of how much revenue Apple reported for its Mac and services sales combined in its most recent fiscal quarter.

The company, and the government of Ireland, are contesting the EC ruling on the grounds that Apple’s tax structure was created on the up-and-up along the lines of laws and regulations that were in place at the time. Both Apple and Ireland also argue that the EC’s decision doesn’t consider the tax laws of Ireland, the U.S. or global agreements on taxation policies.

Don’t expect a truce to be reached any time soon. It’s estimated that the appeals process could take as long as five years before any decision is reached.

Photo: EU Competition Commissioner Margrethe Vestager gives a press conference on Aug. 30, 2016 in Brussels to order Apple to pay back taxes to Ireland. (John Thys/AFP/Getty Images)

 

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  • Nonsense! Apple needs to pay its taxes like any other company. If I were Apple, I would not push it too far. Plenty of possibilities for the EU to hold its ground. Particularly with Brexit looming and president Trump threatening to raise import tariffs on European goods. No doubt, the EU will return the favor. There is this one thing that seems underestimated by foreign companies. The EU needs to prove itself, since citizens of EU countries have become more critical towards the EU. If there is one territory in which the EU can prove itself, then it is harmonizing taxation.

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