European Union finance ministers stuck by their determination that Apple must pay $21 billion in back taxes due to being formally headquartered in Ireland, despite opposition from the United States and the island government.
“International tax loopholes are a thing of the past,” Dutch Finance Minister Jeroen Dijsselbloem said Saturday, saying that Apple must “get ready” to pay the bill.
Apple’s Irish headquarters allow it to avoid owing billions of dollars in U.S. taxes, due to Ireland’s far lower 12.5 corporate tax rate and other policies that “effectively rendered it stateless for tax purposes,” according to Fortune. The practice is common among tech giants, but American frustration over the lost revenue alerted the EU to the financial opportunity. Now the United States and companies in such situations are in agreement that they’re being exploited by European leadership.
“This is a cheap money grab by the European Commission, targeting U.S. businesses and the U.S. tax base,” New York Sen. Chuck Schumer, who will lead Democrats in the next Congress, said last month.
Ireland opposed the ruling, fearing that it would undermine future investment. “The government’s position throughout this process has been that the full amount of tax was paid in this case and no state aid was provided,” Finance Minister Michael Noonan told his nation’s Parliament last week, per The Telegraph. “Ireland did not give favourable tax treatment to Apple: Ireland does not do deals with taxpayers.”
The Irish Parliament voted to back Apple in appealing the EU’s decision before the union’s high court, which could overturn the order or lower the amount of money owed. In that appeal, a key question will be whether Ireland gave Apple special treatment. “Ireland did not give favorable tax treatment to Apple,” Noonan said.
