US government to intervene in Apple’s €13bn Ireland tax dispute with EU

5 Jul 2017

Apple store, Germany. Image: Vytautas Kielaitis/Shutterstock

US set to wade in on Apple and Ireland’s tax war with the EU.

The US government is to intervene in Apple’s appeal against a ruling by the European Commission (EC) to pay back up to €13bn in Irish taxes.

In August 2016, EU competition commissioner Margrethe Vestager levelled a €13.8bn finding against Apple, suggesting that the tech giant benefited from a 1pc corporate tax rate.

‘Ireland did not give favourable tax treatment to Apple’

Both Apple and the Irish Government denied this and pledged to fight the matter in the European courts.

It is now understood that the US government has filed an application with the General Court of the European Union (ECG) to intervene in the case. According to Reuters, this was confirmed by a source close to the government.

It is unclear, however, when the application was submitted and so no one knows at this stage whether the intervention came from the Barack Obama administration or Donald Trump’s.

The EC alleges the iPhone maker paid between 0.005pc and 1pc in taxes between 2003 and 2014 instead of the 12.5pc corporate tax rate.

As a result, it ordered Apple to repay €13.8bn to the Irish Government.

No special treatment for Apple

Apple, which employs 5,000 people in Cork and is in the midst of creating 1,000 additional jobs in Ireland, was outraged by the demand and insists that the EC has overstepped the mark.

The Irish Government was also vehement that no special deal was agreed with Apple. “Ireland did not give favourable tax treatment to Apple – the full amount of tax was paid in this case and no State aid was provided. Ireland does not do deals with taxpayers.”

The decision was also criticised by the Obama administration, which said that the EU was helping itself to cash that should have ended up in the US.

The ECG, the second-highest court in the European Union, is expected to hear the case in late 2018.

The Trump administration, which has proposed a tax break on $2.6trn in corporate profits being held offshore as part of its tax reform, has not said anything in public about the case.

Apple Store, Germany. Image: Vytautas Kielaitis/Shutterstock

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