Apple tax appeal by Ireland accuses EU of ‘exceeding powers’

A submission by Dublin’s Department of Finance argues the EU’s competition watchdog interfered with its sovereignty by finding that the iPhone maker’s tax arrangements in the country meant it had under-paid corporation tax across the bloc.

The document was submitted almost four months after the penalty was imposed against Apple – which is also appealing.

The row concerns Apple’s historic reporting of Europe-wide profits through Ireland, which charges the tech firm only for sales on its own territory at Europe-low rates of 12.5%.

The EU says Apple’s use of shell companies in the country meant its European profits were taxed at effective rates under 1% – allowing it to pay 0.0005% tax alone in 2014 – 50 euro for every one million of profit.

Ireland’s decision to appeal – rather than take the money – is based around its economy’s dependence on multi-nationals.

About 1,000 such firms, attracted by its low headline rate of corporation tax, generate about a quarter of Ireland’s entire output and employ 5% of the workforce.

Apple, which employs 6,000 staff in Ireland, is believed to pump around €16bn into the local economy annually through salaries, tax and investment.

The centrepiece of Ireland’s argument, in this case, is that the authorities in Brussels should have confined themselves to policing illegal state aid that gives an unfair advantage to a particular company.

It says the EU has launched an assault on a policy that Ireland has offered to all foreign companies locating on its soil.

The Department of Finance said: “The Commission has exceeded its powers and interfered with national tax sovereignty.

“The Commission has no competence, under State aid rules, unilaterally to substitute its own view of the geographic scope and extent of the member state’s tax jurisdiction for those of the member state itself.

“The purpose of the State aid rules is to tackle State interventions which confer a selective advantage.

“The State aid rules by their nature cannot remedy mismatches between tax systems on a global level.”

source:news.sky.com