In one of the most recent events related to the debate on tax havens, Apple officially had its 13 billion-euro tax bill from Ireland overturned. This bill dates back to 2016 and has been the source of much debate due to its importance related to tax haven policies.
The Overturned Bill
The new ruling is an overturning of a previous ruling from 2016. That ruling found that Dublin gave Apple illegal tax breaks. The ruling at the time ordered Apple to provide the Irish tax authorities with back payments on that bill.
The original claims by the European Commission were that Ireland let Apple attribute most of its earnings within the EU to a head office in Ireland, despite only existing there on paper. They argued that this allowed the tech giant to avoid paying taxes on its EU revenues. The argument by the commission was that this was illegal aid offered by the Irish state and accepted by Apple.
At the time, the Irish government made the argument that there was no need for Apple to pay these back taxes. The government argued that making Ireland attractive for large corporations was worth the loss.
The New Ruling and the Overturning
This most recent development in the case occurred as part of Apple’s appeal to the second-highest court in the European Union, the General Court. According to the General Court, the original bill was overturned due to a lack of evidence indicating that Apple broke the competition rules within the European Union.
The European Commission initially brought the case against Apple, and it has 14 days in which it can appeal the decision. This would bring the case to the European Court of Justice, which is the supreme court in the EU.
Two Sides to the Debate
As with any many debates, there are two sides to this issue. The odd part is that the Irish government does not want Apple to have to pay it back taxes, which would result in a significant income for the government. The Irish government stands by its original position that the loss of these taxes is worth it due to the benefits in terms of attracting businesses. Additionally, the Irish government maintains its claim that Apple did not receive any special treatment. Apple obviously prefers not to have to pay back taxes, but the business also does not feel it should have to.
According to Apple, the case did not revolve around the amount of taxes paid but where it pays them. Apple released a statement that reminded others that it is the world’s largest taxpayer and understands the importance of taxes.
Although the Irish government supports the overturning of this bill, not everyone in Ireland agrees. Those on the other side argue that the tax money could be put to very good use. They also argue that it hurts the taxation reputation of the country. Margrethe Vestager, the EU competition commissioner, brought the case, and Paul Tang, a Dutch MEP, argued that the ruling is unfair, pointing out that many people pay a significantly higher tax rate than Apple’s 0.05% in Ireland.
Vestager did not immediately indicate whether there would be a further appeal. Instead, she said that the commission would study the judgment before reflecting on its next steps. In a statement, she said that the commission wants all companies to pay fair taxes and that member states providing advantages to multinational companies (in this case, Apple) gets in the way of fair competition.
For now, Apple is enjoying relief, but it is still unclear whether another appeal will occur. Even if this particular case is over, this is far from the end of the debate on tax havens or what officials consider “special treatment” in terms of taxation.
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