Monday, December 19, 2016

Taxation: Apple’s response to the condemnation of the Brussels – Le Figaro

The american giant has indicated that it will appeal the decision of Brussels to require repayment of 13 billion euros in unpaid taxes to Ireland. For its part, Dublin accuses Brussels of violating the country’s sovereignty in tax matters.

The standoff is now engaged. Ordered to pay 13 billion euros of unpaid taxes in Ireland by the european Commission, on 30 August last year, Apple’s response. The american giant announced that it would enter the court of the Court of justice of the european Union, in an interview with Reuters, published on Monday.

In fact, Apple alleges that the european regulators did not take into account the opinion of experts in the taxation of ireland, and of having ignored the law. “The Irish have provided an expert opinion from a tax lawyer irish highly respected. The Commission not only has not contested it (…) but it has probably not even read. Because we find no reference of any kind (in the decision of the Commission),” explains the lawyer of the group, Bruce Sewell.

The firm, with apple also explains that the european Commission has deliberately chosen a method to maximize the fine. “Apple is not a unique case in regards to the law,” stated Bruce Sewell. “Apple is a target practice because it generates a lot of headlines (…) It allows the commissioner to become Danish of the year,” he added in allusion to the title awarded last month to Margrethe Vestager by the daily Danish Berlingske. “In Ireland, we do more than just sell products: we pay so additional taxes,” adds Luca Maestri, chief financial officer, in an interview with the newspaper Echoes, published this Monday. “We’re also the largest taxpayer, we pay us only 8% of the corporate income tax”.

The Apple executive considers that the Commission has overestimated the importance of the european headquarters of Apple established in Cork, in the south of Ireland. Margrethe Vestager, says the cfo of Apple, Luca Maestri, “argues that the tax base that we should pay in Ireland and represents virtually all of the profits that we generate outside the United States (…) in a place where there is no design activities, which does not generate any intellectual property for us”. It is, he continues, a “nonsensical theory”.

This position is eagerly supported by Ireland, which has also challenged the conviction. “The Commission has overstepped its powers and violated [our] sovereignty” relating to the tax on companies, said the irish department of Finance in a text, revealing its arguments in this case. “The Commission does not have jurisdiction, according to the rules in regard to public aid, to substitute unilaterally its own point of view regarding the geographic scope of the tax policy of a member State to the member State itself”, says the text. “[It] tries to rewrite the laws of ireland regarding corporate tax,” said the ministry, stating in addition that the investigation of the european executive had been marked by procedural errors. In this respect, Ireland has already appealed the decision of Brussels, in September last.

as a reminder, the conviction of the inventor of the iPhone is the result of a large survey of the european Commission, started in June 2014. At the end of this investigation, the investigators concluded that “two rulings tax issued by Ireland in favor of Apple had reduced the amount of tax paid by the company in Ireland since 1991″. If the country has a tax rate on corporations low, 12, 5%, Apple would have received a rate on its profits european of only 1% in 2003, which decreased up to 0.005% in 2014, according to the Commission. This last is, therefore, concluded that the fiscal arrangements between Dublin and the american group amounted to illegal state aid.

This case had also attracted the wrath of the u.s. federal government, the u.s. department of Treasury, accusing the eu executive of penalizing foreign investment and undermining the spirit of the economic partnership between the United States and the european Union.


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