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November 9, 2016
Ireland’s Minister for Finance Michael Noonan has confirmed the country will appeal the European Commission’s decision to enforce a €13 billion tax bill against Apple.
The decision, which will hardly come as a surprise for most in the industry, was made during Noonan’s address to the Economic and Monetary Affairs Committee. The Irish government strongly opposed the decision from the European Commission seemingly afraid the removal of such a cosy-relationship with international corporations would have a far greater impact on the Irish economy than the recovery of €13 billion.
“The Government fundamentally disagrees with the European Commission’s analysis and the decision left the Government no choice but to take an appeal to the European Courts and this will be submitted tomorrow,” said Noonan.
“So in that light, given that the case is the subject of ongoing legal proceedings, I am constrained by what I can say in making any further comment.”
Politicians have an excellent ability to say something without saying anything. Telecoms.com took a couple of minutes to translate the above statement into the common tongue and we believe Nooman is actually trying to say:
“How is this any of your business Brussels? Keep your nose out of our affairs and put it back into your fecking waffles”
The European Commission’s objection was built on the amount of tax paid by Apple on an annual basis. In 2011 Apple recorded profits in the European region of €22 billion but claimed only €50 million of that was considered taxable in Ireland, which amounted to an effective corporation tax rate of 0.05%. Corporation tax in Ireland is usually 12.5%.
While the Europe maintains the sovereignty of each individual state, weighing in on national decision and policies in this manner blurs the line of contradiction in some places and stomps all over it in others. The European Commission has some backing as it believes it is an abuse of the EU state aid system, which doesn’t allow for preferential treatment of individual companies.
Although there is justification, it does add weight to the Brexit argument which was based on an individual state making its own decisions without input from European bureaucrats. Back-dating the taxes to 1991 to take the total value to €13 billion is twisting the knife a bit.
This saga has been on-going for a couple of months, though with an appeal it could continue for a substantial amount of time. As the European Commission has not yet uncovered any other relationships in this ilk, the ripples of the ruling are unlikely to spread too far (the 12.5% tax rate is fine by Europe) but Apple would be a loss the Irish would rather avoid.
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