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Ireland to appeal EU's $14B tax order on Apple

December 19, 2016

Ireland will appeal the European Union's order to collect billions in back taxes from technology company Apple. It claims the EU interfered with national tax sovereignty.

Apple Logo
Image: picture-alliance/Nur Photo/J. Arriens

Ireland, an EU member state, says it plans to appeal the European Union's order to collect 13 billion euros ($13.6 billion) from Apple.

"The [European] Commission has exceeded its powers and interfered with national tax sovereignty. The Commission has no competence, under state aid rules, unilaterally to substitute its own view of the geographic scope and extent of the member state's tax jurisdiction for those of the member state itself," read a statement from the Irish Department of Finance on Monday.

Ireland's decision comes nearly four months after European Competition Commissioner Margrethe Vestager announced the EU's decision on August 30. The amount of back tax comes from calculations based on the tax rate Ireland placed on Apple, which was 1 percent of its European profits in 2003 and fell to 0.005 percent by 2014. Apple's European headquarters are located in Cork, and it employs 6,000 people.

USA Apple Tim Cook
Apple CEO Tim Cook has called the EU decision "total political crap"Image: Reuters/B. Diefenbach

'Apple is a convenient target'

Apple CEO Tim Cook has  already denounced the European Commission's decision and Apple also plans to file an appeal against the Commission this week.

Bruce Sewell, general counsel for Apple, told Reuters that his company was singled out for its success.

"Apple is not an outlier in any sense that matters to the law. Apple is a convenient target because it generates lots of headlines," said Sewell.

Ireland has been a member of the EU since 1973 and has long offered lower corporate taxes than other European countries. The Irish corporate tax rate of 12.5 percent is less than half of the European average. The low tax rate entices major non-European companies to expand to Europe and locate their European headquarters in Ireland. Apple, Facebook and Google all have their European headquarters based in the country, which features Europe's fastest-growing economy.

kbd/cmk (AFP, AP, Reuters)