Apple says European Commission ‘overstepped powers’ in Irish tax ruling

21 Feb 2017

An Apple Store in Paris. Image: Novikov Aleksey/Shutterstock

In its appeal, Apple accuses European Commission of making fundamental errors.

Apple has alleged that the European Commission (EC) made “fundamental errors” when it ruled that the iPhone maker owed the Republic of Ireland €13.9bn in unpaid taxes.

In its appeal application to the EU’s general court published in the Official Journal of the European Union, Apple said that the EC attempted to redesign Ireland’s corporate tax system and “violated legal certainty by ordering recovery under an unforeseeable interpretation of state aid law”.

Was Apple tax ruling motivated by politics or law?

Last year, the EC handed Apple a €13.9bn fine, stating that the money was owed to the Republic of Ireland, but also to countries that Apple did business in.

It said the Revenue Commissioners of Ireland gave Apple an unfair advantage in rulings in 1991 and 2007, which allowed Apple to channel its European revenue through head office to subsidiaries in Ireland, which were non-resident for tax purposes.

Both Apple and the Irish Government are appealing the ruling.

Apple said the EC “failed to examine all relevant evidence” and “reason the decision adequately”.

The tech giant added that the EC “failed to recognise that the Irish branches carried out only routine functions and were not involved in the development and commercialisation of Apple IP, which drove politics”.

At an Oireachtas Inquiry in January, European competition commissioner Margrethe Vestager defended the EC’s ruling against Apple and said that the decisions were based on principles of law in Europe.

Ireland’s Finance Minister Michael Noonan, TD, told the same Oireachtas committee meeting that the decision by the EC was politically motivated, and an attempt by Brussels to extend its remit.

An Apple Store in Paris. Image: Novikov Aleksey/Shutterstock

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