Daily Management Review

Failure To Recover Taxes From Apple Results In EU Is Taking Ireland


10/05/2017




Failure To Recover Taxes From Apple Results In EU Is Taking Ireland
In a that is being labeled as “regrettable” by Dublin, Ireland is being taken to the European Court of Justice for its failure to recover up to 13 billion euros ($15.3 billion) of tax due from Apple Inc by the European Commission.
 
Citing one of a number of deals the EU has targeted between multinationals and usually smaller EU states, the U.S. tech giant was ordered to pay the unpaid taxes as it ruled the firm had received illegal state aid in August 2016 by the Commission.
 
“More than one year after the Commission adopted this decision, Ireland has still not recovered the money,” EU Competition Commissioner Margrethe Vestager said, adding that Dublin had not even sought a portion of the sum.
 
“We of course understand that recovery in certain cases may be more complex than in others, and we are always ready to assist. But member states need to make sufficient progress to restore competition,” she added.
 
Apple continued to benefit from an illegal advantage until the aid was recovered, the Commission said and added that the deadline for Ireland to implement its decision had been Jan. 3 this year.
 
Vestager declined to comment on possible penalties on Ireland if it were not to comply with an eventual ECJ ruling against it. She also announced a demand for Amazon to pay about 250 million euros in taxes to Luxembourg.
 
Ireland’s finance ministry said it was committed to collecting the money due pending Dublin’s own appeal of the ruling but added that it had never accepted the Commission’s analysis in the Apple state aid decision.
 
Ireland, it said, was close to setting up an escrow account and had been in constant contact with the Commission and Apple for more than a year. Hiring of at least one investment manager to handle the fund would be included in that.
 
“It is extremely regrettable that the Commission has taken this action, especially in relation to a case with such a large scale recovery amount,” the ministry said in a statement.
 
the government was in “commercially sensitive” talks with Apple about the exact terms of the transfer, in addition to work on the escrow account, Ireland’s Finance Minister Paschal Donohoe said.
 
“I believe we will get a good outcome at the end of it,” Donohoe told state broadcaster RTE.
 
Money was recovered even before appeals were exhausted in other cases of illegal tax advantages, such as Fiat in Luxembourg, Starbucks in the Netherlands and a Belgian scheme for 35 companies, Vestager told at a news conference.
 
Ireland was only planning to conclude the work by March 2018 at the earliest even though it had made progress on calculating the exact amount due, the Commission said.
 
Criticism that they are siphoning off tax revenues and the bloc’s governments are negotiating reforms is faced by Ireland, like the Benelux countries, from bigger EU states.
 
In a Tweet, the latest efforts of the European Commission were applauded by French President Emmanuel Macron.
 
“Bravo to Europe for acting with determination to get tax rules and justice respected,” Macron said
 
(Source:www.cnbc.com) 






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