The United States government is lending support to Apple in its appeal over a humongous European tax bill, two sources with knowledge of the matter reportedly claimed on Tuesday.
The tech giant was levied with a retroactive demand for 13 billion euros ($14.8bn) in back taxes last August, after the EU ruled its deals with the Irish government were illegal subsidies.
Apple appealed to the General Court, based in Luxembourg, and now the Trump administration is now weighing in on the iPhone-maker’s behalf, Reuters reports.
An unnamed source told the agency: “I can confirm the United States filed an application with the European Union General Court to intervene in the case involving the retroactive application of state aid rules to Apple.”
The case, which centres around an effective tax rate of 0.005% paid on Apple’s European profits from its Irish headquarters, will be heard in late 2018, a different source said.
Apple had previously said the European Commission had of taken “unilateral action and changed the rules, disregarding decades of Irish tax law, U.S. Tax law, as well as global consensus on tax policy.”
Meanwhile, Apple CEO Tim Cook has said: “It’s important for everyone to understand that the allegation made in the EU is that Ireland gave us a special deal. Ireland denies that.”
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Pay your taxes Apple. Simple.
True, and I do agree that big companies should not be exempt from paying the same tax rate as the little guy, BUT…. they made a deal with a government which that government thought was acceptable in order to secure their business in their country. It’s kind of like suppliers competing on price and happens all the time. The reality is that this happens and Ireland is a bugger for it.
Whether the EU really should be involving itself at this level is a big question for me – it’s what has meant our aluminium industry has had to bugger off and why we almost lost our steel industry. Supranational competencies in this area really do make back room deals a reality whereas if governments were allowed to openly negotiate then everything would be out in the open and the public could actually assess whether the government was working in their interests. Instead it’s all under the table and hidden from oversight.
Unless Trump offers a tax holiday rate which is lower than 0.005%, Apple will have little incentive to repatriate the money.