Trans-Atlantic Spat

Apple Seen Losing Tax Appeal

epaselect epa05515155 Danish EU Commissioner for Competition Margrethe Vestager speaks at a news conference on a case of illegal tax benefits for US company Apple at the European Commission, in Brussels, Belgium, 30 August 2016. Ireland gave illegal tax benefits to Apple worth up to 13 billion euros, Vestager said explaining the results of European Commission investigations examining whether decisions by tax authorities in Ireland, with regard to the corporate income tax to be paid by Apple comply with the EU rules on state aid. The Commission has been investigating under EU state aid rules certain tax practices in several member states following media reports alleging that some companies have received significant tax reductions by way of 'tax rulings' issued by national tax authorities. EPA/STEPHANIE LECOCQ +++(c) dpa - Bildfunk+++
E.U. Competition Commissioner Margrethe Vestager is looking into tax benefits for Apple.
  • Why it matters

    Why it matters

    Citing E.U. overreach on illegal state aid cases against Apple and several other U.S. companies operating in Europe, the Obama administration is considering unspecified “potential responses.”

  • Facts


    • The E.U. Commission on Tuesday ruled that Ireland must recover €13 billion ($14.5 billion) in back taxes, plus interest, from Apple for illegal state aid from 2003 to 2014.
    • The Obama administration and U.S. Congressional leaders blasted the decision, while the U.S. Treasury Department pointed to unspecified “potential responses” to perceived E.U. overreach on tax authority.
    • Both Ireland and Apple plan to appeal the ruling – which could take several years for European courts to resolve. E.U. tax experts consider a favorable appeal decision unlikely.
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American politicians Charles Schumer and Paul Ryan could hardly be more different. But Mr. Schumer, the left-leaning Democratic Senator, and Mr. Ryan, the conservative Republican Speaker of the House of Representatives, are united in their opposition to the European Union’s decision to slap Apple with €13 billion ($14.5 billion) in back taxes.

The European Commission’s ruling on Tuesday, which ordered Ireland to collect the record penalty from the Silicon Valley technology icon, was “a cheap money grab,” Senator Schumer blasted.

“This decision is awful,” agreed Speaker Ryan, calling the move a “direct violation of many European countries’ treaty obligations” and “precisely the kind of heavy-handed taxation that kills jobs and opportunity.”

Led by E.U. Competition Commissioner Margrethe Vestager of Denmark, the European Union’s executive body called for Irish tax authorities to recover the “illegal tax benefits” from 2003 to 2014, plus interest that experts say could add another €6 billion to Apple’s bill.

But judging by the initial reactions in Washington, with Obama administration officials also condemning the action, the ruling has the potential to damage relations with the European Union.

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