Ireland is formally appealing against the European Commission’s ruling, which asked it to collect over $14 Billion in back taxes from Apple. While you may be stumped by why Ireland is basically saying no to a huge amount of money that actually is its in the first place by law, the state believes that Apple’s contributions though other channels far outweigh what it owes in taxes.
Speaking on the topic, Ireland’s finance minister Michael Noonan said,
The government fundamentally disagrees with the European Commission’s analysis and the decision left no choice but to take an appeal to the European Courts and this will be submitted tomorrow.
So basically, the country is disagreeing with a decision that has been made by a committee comprising members from the rest of the continent. However, each to his own.
The ruling comes after a three year inquiry by the European Commission found that Apple had seriously underpaid the taxes that were due to it. For example, only 0.005% to 1% of the total taxes owed to Ireland were actually paid by Apple between 2003 and 2014. This is in sharp contrast to the 12.5% corporate tax rate hat Ireland actually levies upon corporations operating within its borders.
You may find yourself stumped at how Ireland could allow what would be termed as a Gross Transgression almost anywhere else in the world. Well, the country is a surprisingly great haven for multinational corporations and Ireland encourages companies to set up operations within its borders. It argues that the other benefits brought about when these companies set up their offices, manufacturing facilities and data centers withing its borders far outweigh the loss incurred due to tax relaxations.
Indeed, many huge tech behemoths such as Apple, Microsoft has one or more permanent operations in Ireland.
Apple — obviously — is also against the European Commission ruling and indeed, has denied the commission’s tax evasion charges, calling them “total political crap”. However, the European Commission obviously has its own reasons for the mammoth $14 Billion figure. With Ireland on Apple’s side though, the matter is likely to take years to resolve.