Ireland will lodge an appeal against the European Union over its order for Apple to pay about $14 billion in allegedly unpaid taxes to the country.
Ireland's stance on the decision is unusual at first glance, as the country's government is the one that stands to benefit from the record $14 billion tax order. However, there is a bigger reason for the planned appeal, which Ireland is planning to jointly launch with Apple.
Apple Ordered To Pay $14 Billion In Taxes Due To Special Deals In Ireland
A few months ago, the European Commission ruled that Apple largely benefitted from a special tax regime in Ireland and that the company should pay the country back taxes worth about $14 billion.
The decision, which comes after a three-year investigation, is based on the fact that Apple only paid corporate taxes in Ireland at a rate of 1 percent compared to the standard corporate tax of 12.5 percent.
Apple CEO Tim Cook, in response to the judgment, reiterated that Apple never asked for nor received any special deals from Ireland and that the European Commission was looking to write the company's history in Europe.
Apple and Ireland then said that they would appeal the unfair ruling, and that appeal is now being lodged.
Ireland's Accusations Against The European Commission
Ireland is accusing the European Commission of exceeding its powers and interfering in the national sovereignty of the country over its tax affairs.
"The Commission has manifestly breached its duty to provide a clear and unequivocal statement of reasons in its decision, in relying simultaneously on grossly divergent factual scenarios, in contradicting itself as to the source of the rule that Ireland is said to have breached, and in suggesting that Ireland granted aid in relation to profits taxable in other jurisdictions," said the government of Ireland in a statement.
The focal point of Ireland's appeal is that Competition Commissioner for the European Union Margrethe Vestager should have only looked at illegal state aid that could give unfair advantages to companies. Instead, the European Union attacked Ireland's tax policies, which has led to the $14 billion order to Apple.
The country is looking to protect its tax regime, which has helped in attracting investments from multinational companies. About 10 percent of Ireland's workforce are employed in these companies, which goes to show how important it is for the country to fight back against the European Union's apparent overstepping of authority with the $14 billion tax order.
Apple's Tax Troubles Continue
The $14 billion tax order is by far the biggest that the European Commission has made among several cases against tax deals allegedly granted to companies by members of the European Union. It is, however, just one of the many troubles that Apple has had regarding taxes.
Earlier in the year, Apple cofounder Steve Wozniak suggested that the company should pay 50 percent in taxes. Barry Chang, the mayor of Cupertino, also said that Apple should pay more taxes, claiming that the company is not making enough contributions to the city for the improvement of its infrastructure.