Apple tax decision imminent – Noonan meets EU Competition Commissioner

13 Jul 2016

An Apple Store on New York's Upper West Side. Apple is strenuously denying it has any special tax arrangement with the Irish Government. Image source: Apple

There is growing expectation that a ruling on the Apple tax case is imminent and, yesterday (12 July), Ireland’s Finance Minister Michael Noonan met EU Competition Commissioner Margrethe Vestager.

Vestager is also due to meet with US treasury secretary Jacob Lew, a figure who has complained about the EU unfairly targeting US multinationals operating in Europe.

In the worst-case scenario for it, Apple could be liable for a tax bill of $19bn. However, figures recently compiled by Bloomberg Intelligence show that, if the EU rules against Apple and Ireland, the tax bill that Apple would have to pay to the Irish Government would likely be closer to $8bn.

‘We don’t feel that there has been state aid involved, and I suppose we look forward to that outcome happening at the end of the day and being vindicated in that view’

At the core of the European Commission investigation into Apple’s tax affairs is whether Apple’s tax arrangements with the Irish Government went against international guidelines.

In preliminary findings in 2014, European antitrust authorities said Apple’s tax arrangements were improperly designed to give the company a financial boost in exchange for creating jobs in Ireland.

Apple has been operating in Ireland since 1980 and employs 5,000 people in Cork. Last year, Apple CEO Tim Cook announced a further 1,000 jobs for the city.

‘No special deal with Irish Govt’

Both Apple and the Irish Government have been vehement that no special tax arrangements existed for Apple.

Three years ago, responding to questions from Kara Swisher and Walt Mossberg, Cook was emphatic: “We have no special deal with the Irish Government.”

In March, the country manager of Apple Ireland, Cathy Kearney, addressed the European Parliament.

She said that the company is not getting unfair state aid and remains “committed to Ireland”, whatever the outcome of the European Commission’s case against the iPhone maker.

“We feel that we’ve paid every cent of tax that’s due in Ireland,” Kearney said.

“We don’t feel that there has been state aid involved, and I suppose we look forward to that outcome happening at the end of the day and being vindicated in that view,” Kearney said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years