US Business Group says Apple Tax Ruling Must be Overturned

After Brussels’ ruling that Apple must pay back Ireland €13bn in taxes, Business Roundtable has warned of ‘grievous self-inflicted wound’ for EU and its people.

Unless they overturn Brussels’ demand that Apple pay the Irish government €13bn (£11.4bn), US businesses have warned European leaders they risk a “grievous self-inflicted wound”.

The Business Roundtable group defended Apple over its tax dispute with the European commission in an open letter to the leaders of the 28 European Union countries.

After Brussels ruled that the tax breaks it was given between 1991 and 2015 amounted to unlawful state aid, the US tech giant was ordered to pay €13bn to Ireland last month.

The decision “must not be allowed to stand”, said the group of US chief executives, who between them run companies with $7tn of revenue and 16 million employees.

“The precedent set by this decision, if upheld, would increase uncertainty significantly with a consequent adverse effect on foreign investment in Europe, making this decision a grievous self-inflicted wound for the European Union and its citizens.”

The signal that companies could have their assets seized by states “seeking extra revenue or seeking to punish a successful foreign competitor” could be the interpretation for the non-EU countries from the ruling – if left unchallenged.

The retrospective nature of the ruling on a tax deal reached in 1991 was a point of particular grievance for the 185 chief executives who it counts as members, the Business Roundtable said.

“Commercial success is uncertain for any business endeavour but companies should have complete confidence that sovereign countries are committed to honouring their laws and have the authority to do so,” they wrote.

 

“The retroactive nature of the EC decision means that business can never have certainty even on its past tax liability unless or until the EC chooses to decide accordingly.”

The multibillion pound demand was termed as “total political crap” by Apple chief executive, Tim Cook, who had warned that it could affect investment in the EU.

The German finance minister, Wolfgang Schäuble, the European Union president, Donald Tusk, and the US secretary of state, John Kerry were also sent copies of the letter which echoed Cook’s threat.

The commission’s actions “promote tax uncertainty – and unless overturned they will disrupt trade and investment, with the most direct consequences to be borne directly by EU countries and their citizens”, it said.

A call “put an end to the use of state aid investigations that will hamper economic growth by undermining cross-border investment” on the member states was given in the letter.

Amid tax investigations into American firms such as Starbucks, McDonald’s and Amazon,  the group has previously lashed out against what it perceives as Europe’s “new and dangerous form of protectionism”.

Objection to an agreement allowing Apple to pay a maximum tax rate of just 1% was the basis of the commission’s ruling against Apple. While the usual rate of corporation tax in Ireland is 12.5%, in 2014, the tech firm paid tax at 0.005%.

(Adapted from The Guardian)

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