The European Commission says it will be appealing against a court ruling, which says Apple is not liable to pay €13 billion (£11 billion), which is a backlog of taxes the tech giant owes the Irish government. This is an effort by the commission to put a stop to all manners of pretty sweet deals that multinationals may be enjoying across the European Union member countries.
Margrethe Vestager, the European Union’s executive vice president and competition chief, stated on Friday that the commission would appeal to the EU Court of Justice to compel Ireland to collect the unpaid taxes and also the interests accrued from taxes from Apple.
In a statement, she says the court, in its ruling, had made a number of grave errors. She reiterated the need for the commission to use all available resources within its power to force companies to pay their fair share of taxes. This move, she further stated, will enable citizens of EU member countries, and the public in general, to benefit from these crucial investments – more so, this period that Europe is on a path towards economic recovery.
It will be recalled that in 2016, the commission had mandated Apple to pay for the largescale low payments of taxes from profits that it accrued across European Union member countries between 2003 and 2014. As part of its fraudulent scheme to underpay on taxes, the commission had accused the world-renowned smartphone maker of operating shell companies established in Ireland, with the connivance of the Irish tax authorities in order to report tax rates well below 1%.
The tech giant and the Irish government had strongly denied these claims, saying there was no connivance to underreport profit margins to avoid paying the required tax. The two parties had been successful in their bid to challenge the order in the general court. In July, the general court, based in Luxembourg, had ruled that the EU commission had failed to prove, beyond every reasonable doubt, that Apple was a beneficiary of the fraudulent arrangement. This decision proved to hinder efforts by the commission to put an end to tax avoidance by companies, especially multinational companies.
Vestager said the case was an opportunity for the commission to take another look at state aid rules in tax planning cases, which would definitely be pursued. She said the steps the commission had taken so far were necessary in order for multinationals to stop receiving tax advantages, which were detrimental to their rivals, thereby adversely affecting fair competition in the European Union.
The appeal, whose deadline was midnight on Friday, means that the €13 billion, alongside its interest of about €1.3 billion, will remain in an escrow account until the Court of Justice ruling, whose judgment could be delivered in 2022.
However, Apple was hopeful of the appeal being set aside, saying it will respect Irish laws. The Irish government, on its part, said that it was studying the appeal, which was expected and will respond soon.