Irish finance minister: Dublin, EU agree on Apple tax estimate

Apple agreed a special tax rate with Ireland in 1991. [lookcatalog/Flickr]

The European Commission’s estimate that Apple owes Ireland up to €13 billion in a disputed tax ruling is unlikely to be altered greatly by Dublin’s calculations, the Irish finance minister said on Thursday (2 February).

The Commission ordered Apple to pay Ireland the unpaid taxes after ruling in August that the iPhone maker won sweetheart tax deals from Dublin amounting to illegal state aid. The Irish government and Apple have appealed the demand.

Irish parliament backs Apple tax appeal after angry debate

Ireland’s parliament battled through an ill-tempered debate on Wednesday to vote in favour of appealing a European Commission ruling ordering the country to collect billions of euros in unpaid taxes from tech giant Apple.

The Commission said it expected that the amount owed would total €13bn plus interest but required Ireland to calculate the exact sums based on the methodology designed and set out in the ruling.

“So far my officials haven’t indicated to me that it’s not going to seriously overrun the €13bn or come seriously short of the €13bn, but there are other years to be assessed and so on,” Finance Minister Michael Noonan told a parliamentary committee, referring to the ten-year period the calculations are based on.

Apple, Ireland lines of defence diverge in state aid case

In its challenge of the European Commission’s €13bn recovery decision, Ireland does not agree with Apple’s position that almost the entirety of its profits are generated by R&D, and should therefore be taxed in the US, PaRR has learned.

Noonan said Irish officials were still negotiating the terms of a ring-fenced escrow fund where the back taxes will be held pending the outcome of the appeals process, which the Irish government has said could take four or five years.

Ireland requested an extension to complete the collection of the funds after a formal deadline for doing so elapsed last month. The EU’s antitrust regulator said on Tuesday (31 January) that the Commission was satisfied with Ireland’s progress to date.

 

On 30 August, the executive concluded that two tax rulings adopted by Ireland substantially and artificially lowered tax paid by Apple in the country since 1991.

Apple Sales International and Apple Operations Europe, two Irish subsidiaries of the US parent, hold the IP rights to sell and manufacture Apple products outside North and South America.

The rulings claimed almost all the sales profits booked by these subsidiaries were internally attributed to a head office that had no premises and were not subject to tax.

The European Commission held that in 2011, 97% of the €16bn profit reported by Apple Sales International was allocated to the untaxed head office in Ireland.

This percentage increased to 99% in 2014. Together with the US government, Apple is arguing that these profits will be taxed upon repatriation to the US.

European Commission

 

 

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