Vestager denies €13bn Apple tax ruling was political

1 Sep 2016

Margrethe Vestager, European Commissioner for Competition

Margrethe Vestager, the EU’s competition commissioner, has denied accusations by Apple CEO Tim Cook that her recent ruling that Apple must pay Ireland €13bn in back taxes came from a political base.

The European Commission this week ruled that Apple must pay €13bn in back taxes to Ireland for revenues booked through operations based in Ireland.

The rub of the issue is that both Apple and Ireland claim that the tech giant was fully compliant with Irish sovereign tax rules.

‘We have a court practice that says quite clearly that state aid can come in many forms. In this case, it’s as a tax benefit’

Ireland’s Finance Minister Michael Noonan is urging the cabinet to agree to file an appeal.

Apple is also going to appeal the ruling in the European courts. The case is likely to rumble on for several years while the €13bn languishes in an escrow account.

“It’s maddening. It’s disappointing. It’s clear it comes from a political base and has no basis in fact,” Cook railed in an interview on RTÉ this morning.

“I’m pretty confident that the [Irish] Government will do the right thing. That is to stand up and fight against this overreach.”

Tax harmonisation ploy

Other theories behind the EU ruling are that it is just a pawn in an overall strategy to bring about tax harmonisation in the EU. Liza Lovdahl Gormsen, a senior lecturer in law at the University of Manchester, recently alleged in an article in The Telegraph that the EU is using state aid rules as a tool to bring about taxation reform.

However, according to The Irish Times, Vestager has refuted Cook’s claims that there was a political motive behind the ruling.

“I know what we are obliged to do and that is to take decisions that are independent, based on the treaty, the fact of the case and can be checked by the European courts,” Vestager said.

Vestager said that state aid cases had been taking place since 1958.

“We have a court practice that says quite clearly that state aid can come in many forms. In this case, it’s as a tax benefit. The only politics of that is that we’re here to make sure the treaty is upheld and this is in the treaty.”

Margrethe Vestager image via Friends of Europe on Flickr/Creative Commons

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