The European Union stated that Apple owes Ireland $14.5 Billion dollars in back taxes. The basis of which the tax agreement with Apple is anti-competitive, given the disparity that exist between the profits that Apple makes in Ireland compared to what they pay in taxes.[1] For instance, Apple profited 22 Billion from Ireland in 2011. [2] Of this, the Irish Tax authority found that only 50 Million Euros worth was taxable.[3] Ireland themselves, do not wish the European Union’s decision to stand. The agreement between Ireland and Apple was favorable to both parties. Irish Finance Minister Michael Noonan stated that he profoundly disagreed with the European Union’s decision and would appeal.[4] If the decision were to stand, it may threaten Ireland’s low corporate tax rate, which remains Ireland’s most attractive draw from multinational companies.[5] Further, there is doubt that the European Union’s decision would stand if appealed in courts. Tax experts doubt that the European Union would be able to set a precedent to determine whether countries have applied their tax regulations fairly, even under the guise of them being anti-competitive. [6]
[1] Chee, Foo & Halpin, Padraic, EU hits Apple with $14.5 billion Irish tax demand, Reuters, Aug. 30, 2016; http://www.reuters.com/article/us-eu-apple-taxavoidance-idUSKCN114211
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Kanter, James & Scott, Mark, Apple Owes $14.5 Billion in Back Taxes to Ireland, E.U. Says, Nytimes, Aug. 30, 2016; http://www.nytimes.com/2016/08/31/technology/apple-tax-eu-ireland.html