Thursday 1 September 2016

EU to hand Apple hefty Irish tax bill


EU Orders AAPL.O to Pay Hefty Tax Bill

Recently, Apple-AAPL.Ohad been orderedby the European Commission antitrust regulators to pay up 13 billion euros around $14.5 billion, by way of taxes together with interest to the Irish government after ruling that a special scheme to route profits through Ireland had been illegal state aid. It is said that Commissioner Margrethe Vestager would be holding news conference on antitrust case towards noon (1000 GMT) in Brussels.

In spite of the subject of the case not provided, she was expected to feature her verdict on why a deal which had stimulated the U.S. tech giant to route vast profits through Ireland had broken EU state aid laws apart from government giving some firms unfair advantages.The decision is probably to annoy Washington who hadblamed Brussels of disturbance against the corporate success stories of U.S.

Ireland had been accused by the European Commission in 2014 of evading international tax rules by permitting Apple to house profits amounting to tens of billions of dollars from tax collectors for maintaining jobs. The accusation had been rejected by Apple as well as Ireland and both have stated that they would be appealing any contrary decision.

Decision – Reverse Engineered

The source had mentioned that the Commission would recommend a figure in back taxes, expecting it to be collected though it would be the decision of the Irish authorities to calculate precisely what are maintained. An excess bill of 1 billion euros ($1.12 billion) would have been more far more than the 30 million euros each the EU had earlier ordered the Dutch authorities to pull through, for their tax deals, from U.S. coffee chain Starbucks and Luxembourg from Fiat Chrysler.

 It is said that both the companies have appealed those decisions. In 2014, when it had opened the Apple investigation, the Commission had informed the Irish government that the tax decisions agreed in 1991 and 2007 with the iPhone maker amounted to state aid and could have broken the EU laws.

The Commissioner had mentioned that the decisions were reverse engineered to make sure that Apple had the nominal Irish bill. The minutes of meetings between the representatives of Apple as well as the Irish tax officials had indicated that the tax treatment of the company had been inspired by employment considerations.

EU Executive’s Tax Investigations – Departed from International Taxation Standards

Apple tends to hire 5,500 workers or about a quarter of European based staff in the Irish city of Cork where it seems to be the largest private sector employer stating that it paid 12.5% rate of Ireland on all the income which it tends to generate in the country.

The low corporate tax rate of Ireland which had been a cornerstone of economic policy for 20 years, had drawn investors from most of the important multinational companies, where the staff accounts for nearly one in 10 workers in Ireland. Dublin had been urged by some opposition Irish lawmakers to accumulate whatever tax the Commission tends to order.

 However, the foremost opposition party Fianna Fail, supporting the minority administration relies on passing laws stated that it would assist an appeal depending on the reassurances it had been provided by the government so far. Last week the U.S. Treasury Department had published a white paper which stated that the EU executive’s tax investigations had departed from the international taxations standards and could have been an enormousinfluence on the companies in U.S. The Commission had stated that it tends to treat all companies likewise.

No comments:

Post a Comment

Note: only a member of this blog may post a comment.