Apple Officially Appeals EU’s Decision On Back Taxes

Image courtesy of Adam Fagen

Three months after Apple CEO Tim Cook called the European Union’s ruling that the company owes Ireland about €13 billion in back taxes political crap,” the tech giant officially filed an appeal against the decision, adding to the already years-long battle between the Commission, Apple, and Ireland. 

The Wall Street Journal reports that with the latest filing Apple complained about the fairness of the two-year investigation that found Apple received preferential treatment in terms of taxes and owes Ireland about €13 billion — or $14.5 billion — for 10 years’ worth of back tax.

The appeal, which disputes the allocation of nearly all of Apple’s overseas profits to Ireland, comes on the same day that the EU released its decision in full.

At issue with the EU is whether two Irish tax rulings granted to Apple gave the company special treatment, of if the rulings were a simple interpretation of Irish tax law.

According to the WSJ, the full decision claims that Apple and Ireland offered no evidence to justify the small portion of taxes paid to the country. For example, the commission claims that two Apple units registered in Ireland brought in $130 billion in profit over 11 years. Those funds should have been taxed at a rate of 12.5% — Ireland’s corporate tax rate — but weren’t.

Instead, the EU found that Irish authorities had been “inconsistent” and “not systematic” in their tax treatment of the tech company.

In its appeal, Apple says the allocation of its overseas profit is incorrect, as the company doesn’t manage or create most of its intellectual property in the country, a rep for the company tells the WSJ.

“It’s been clear since the start of this case that there was a predetermined outcome,” the spokesperson said.

The company believes EU “took unilateral action and retroactively changed the rules” to selectively target Apple, the rep said.

At the time the ruling was announced in August, Apple CEO Cook took issue with the decision, saying that “no one did anything wrong,” going so far as to call the ruling “political crap.”

For its part, Ireland has already filed an appeal of the EU’s ruling, the WSJ reports. Officials on Monday said that the EU overstepped its powers with the decision.

Apple Hits Back Over EU Irish-Tax Decision [The Wall Street Journal]