EU’s court decision on ‘Apple’s Tax Bill’ in Ireland is a challenge for corporate tax reforms

epa08547008 (FILE) - A man walks in front of the Apple logo during a product announcement event from the Bill Graham Civic Auditorium in San Francisco, California, USA, 09 September 2015 (reissued 15 July 2020). The General Court of the European Union in Luxembourg announced on 15 July 2020 that it has annulled a 2016 decision taken by the Commission regarding the Irish tax rulings in favour of Apple. Europe's second-highest court said that Apple will not have to pay Ireland 13 billion euros in back taxes after winning an appeal. EPA-EFE/MONICA DAVEY

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Policymakers will have to pay greater care to the legal foundations of corporate tax reforms after an EU order for Apple to pay 13 billion euros ($14.9 billion) in Irish back taxes was rejected in court, Ireland’s finance minister said on Wednesday.

The EU General Court on Wednesday overturned the landmark 2016 decision by EU competition commissioner Margrethe Vestager that Ireland should claw back €13 billion in unpaid taxes plus interest from Apple.

“I imagine that one of the consequences of this is that care will be given for what are the legal foundations for pursuing change in this area, and maybe that is the most likely development of the ruling,” Paschal Donohoe told a news conference.

EU antitrust chief Margrethe Vestager vowed on Wednesday to continue her fight against tax measures used by multinationals.

She said she would study the General Court’s ruling before deciding on the next step. “The (European) Commission will continue to look at aggressive tax planning measures under EU State aid rules to assess whether they result in illegal state aid,” she said in a statement.

“At the same time, state aid enforcement needs to go hand in hand with a change in corporate philosophies and the right legislation to address loopholes and ensure transparency.”

Ireland welcomed the judgment by Europe’s second-top court on Wednesday. “Ireland has always been clear that there was no special treatment provided to the two Apple companies. The correct amount … was charged in line with normal Irish taxation rules,” the finance ministry said in a statement.

Ireland had appealed the EU decision “on the basis that Ireland granted no state aid” and the decision today from the Court supports that view,” it said.

Apple said that this case was not about how much tax we pay, but where we are required to pay it. We’re proud to be the largest taxpayer in the world as we know the important role tax payments play in society.

Reuters / Politico 

 

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