The European Commission has decided and ordered Apple to pay $ 13 billion to Ireland. A record sum that the American giant does not wish to pay.
a record fine of $ 13 billion
In the viewfinder of the European Union for many years as well as other major groups such as Google or Microsoft, Apple just be imposed a record fine on Tuesday.
The European Commission complains that the American group to have received “benefits illegal tax “ between 2003 and 2014, which allowed Apple ” to pay significantly less tax than other companies for many years “. In its statement, the Commission adds that Apple has been applied “an effective tax rate of 1% of companies on its European profits in 2003, rates decreased to 0.005% in 2014″ and believes that Ireland must now recover unpaid taxes by Apple on its territory to 13 billion euros plus interest.
note that two agreements between Apple and administration Irish Revenue (tax rulings) have been identified, the first in 1991 and second in 2007 but “the Commission can not order the recovery of unlawful state aid that over a period of ten years prior to his first request information on the subject, either in 2013 this case “.
If the tax rulings are legal, the investigation has dismantled how Apple has benefited from an advantage over its competitors by paying much less tax than other companies, which is illegal under EU rules on state aid. In fact, Apple could avoid tax on virtually all profits generated by the sales of its products in Europe, the US company that decided to record all sales in Ireland rather than in countries where products were sold.
in Dublin, Apple has two companies (Apple Sales International and Apple Operations Europe) that 100% control and which are divided the various brand activities. The first, Apple Sales International, is responsible to purchase Apple products from around the world equipment manufacturers and sell them in Europe (and the Middle East, Africa and India) as explained press the European Commission. Moreover, it is this company that customers contractually bought products of the same brand if physically the transaction took place in another European country (an Apple Store in France for example). Result, Apple was recording all sales, and profits that resulted from directly in Ireland.
Apple paid only 0.005% of taxes in Ireland in 2014
The benefits made were then assigned internally to a “seat” Apple Sales International located outside Ireland. In reality, this “seat” was not located in any country, had no employees, had no premises and its activities were limited to occasional meetings of the Board. Yet it was he who recovered the vast majority of profits which then escaped taxation. Indeed, only a small percentage of Apple Sales International profits were taxed in Ireland.
Finally, the company was making annual payments to Apple in the United States to finance the actions of research and development conducted on behalf of Irish companies in the United States. In fact, these expenditures “have helped fund more than half of all research efforts of the Apple group in the United States to develop its intellectual property worldwide,” were “deducted from the profits recorded by Apple Sales International and Apple Operations Europe in Ireland each year,” .
The European Commission estimates that these payments amounted to about $ 2 billion in 2011 and increased significantly in 2014.
the second company, Apple Operations Europe, was responsible for the manufacture of certain ranges of computers for the Apple group. As with Apple Sales International, the majority of that company’s profits were affected internally to its “seat” and were not taxed anywhere.
A method of internal distribution of profits deemed “artificial “ and unwarranted ” factually or economically “ in Brussels which believes that the sales profits of Apple sales International and Apple Operations Europe should have been recorded by the Irish branch and be taxed in Ireland.
Ireland and Apple will appeal
not surprisingly, the Commission decision does not satisfy neither Apple nor Dublin. On its website, Apple issued a “Message to the Apple Community in Europe” in which the company boasts its balance sheet in Ireland, explaining that today use “nearly 6000 people throughout Ireland ‘ and pushed “countless multinational companies” to invest in Ireland and particularly in the city of Cork.
Apple then denies having received “Special tax treatment” and specifies that it respects national law and pay taxes he owes in Ireland and in each country where it operates.
Finally US firm blames the European Commission that “is rewriting the history of Apple in Europe” and regrets of “duty retroactively pay additional taxes to a government that says we owe him nothing more than what we have already paid “.
Like Ireland, Apple states that it intends to appeal this decision.
(source)
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