Earlier this week, the commission said the technology company should pay back the amount, plus interest (that would bring it to about $27 billion). The retroactive tax bill is believed to be the largest in history. Both Ireland and Apple said they are appealing the ruling which is likely to have worried much international technology companies maintaining operations in Ireland.
Many such firms were attracted to the country due to its low tax regime. Ireland is understandably worried by the ruling because if could impact turn off a lot of foreign investors.
“No one did anything wrong here and we need to stand together. Ireland is being picked on and this is unacceptable,” Cook said in an interview with the Irish Independent newspaper, “It’s total political crap.”
Asked if she accepted Cook’s statement, Margrethe Vestager, the commission’s competition chief, said: “No, I will not. This is a decision based the facts of the case.”
According to a report from the news service Reuters, Vestager said the calculations were based on data provided by Apple and evidence presented during hearing hearings on the company’s tax issues in the United States.
Vestager said the tax rate paid by Apple in Ireland was not normal. How could anyone think it was fair arrangement, she said, to allow company as large as Apple to pay a tax rate of 0.0005 per cent (the tax rate Apple paid to Ireland in 2014).
Cook said he thinks Apple “was targeted” by the E.U. and that it wants to “re-allocate taxes that should be paid in the U.S. to the E.U.”
Washington has sided with Apple saying European Union wants to obtain tax revenue that should go to the U.S. government.
On the other hand, countries like Germany and France are backing the European Commission.
What the E.U. objects to is the prevalence of “tax residence of convenience,” according to a report by the CBC. This occurs when a subsidiary company legally owns such things as patents and licences are located in a low-tax country. The practice allows profits from parts of the company in high-tax regimes to be transferred to low-tax countries in the form of charges, fees, and royalties.
Irish rules also allowed companies to report to their home country that they were based elsewhere.
These profits, the European Commission said: “were not subject to tax in any country under specific provisions of the Irish tax law.”
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