European Union sues Ireland for failing to collect back taxes from Apple

Andrew Cummings
October 6, 2017

The European Commission has referred Ireland to the European Court of Justice for failing to recover €13 billion from Apple which it has judged to be illegal tax benefits under EU state aid rules.

The finance ministry additionally said it had been in constant contact with the European Commission and Apple for more than a year and was close to setting up an escrow account, through which the money will be deposited.

"We of course understand that recovery in certain cases may be more complex than in others, and we are always ready to assist", said EU's commissioner for competition Margrethe Vestager in a statement.

The ruling is being appealed by the Irish Government and by Apple.

"Ireland has to recover up to 13 billion euros in illegal state aid from Apple". It says it never accepted the Commission's financial analysis of the situation, but nevertheless will retrieve the money from Apple once the nation's appeal of the order is complete. Ireland fully respects the rule of law in the European Union.

"The European Commission has launched an effort to rewrite Apple's history in Europe, ignore Ireland's tax laws and upend the worldwide tax system in the process", wrote Cook.

In a statement released after the decision, the Irish ministry of finance said it had been working at full tilt on recovering the cash which it described as an "unprecedented" amount in terms of size.

The department accused the European Commission of unfairness, incompetence, overstepping its authority, and interfering with Ireland's sovereignty in national tax affairs.

In the August of 2016, the Commission mandated the Apple to settle the unpaid taxes as it was claimed that the company has acquired illegal state aid.

It comes as the Commission took a double swipe at USA tech industry by landing Amazon with a bill of around 250 million euros (£221 million) in back taxes after stating that the firm's sweetheart tax deal with Luxembourg broke state aid rules.

It said Apple's tax arrangement had enabled one subsidiary, Apple Sales International, to pay 0.005% tax in 2014 - just £50 in taxes on every £1m of profit.

Recent reports show that the European Union is expected to levy a massive fine against Amazon soon for allegedly evading the appropriate amount of tax payments by using Luxembourg for certain tax filing purposes. Until the illegal aid is recovered, the company in question continues to benefit from an illegal advantage, which is why recovery must happen as quickly as possible.

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