Potentially years of litigation is likely to be triggered as Ireland is to take the fight over Apple Inc.’s record 13 billion-euro ($14.4 billion) tax bill to a European Union court with the Irish Finance Minister Michael Noonan taking the case up.
In a case that will test the EU’s powers to use state aid law in what governments argue are national affairs, Ireland is lated to file its appeal against the European Commission’s decision to force Ireland to claw back alleged tax subsidies.
Targeting tax rulings regulators deemed to be unfair, a handful of pending appeals by other EU nations and companies that received similar decisions in the past year will be joined the challenge at the EU General Court in Luxembourg. The EU’s Apple decision was the biggest ever state-aid payback demand.
“The government fundamentally disagrees with the European Commission’s analysis and the decision left the government no choice but to take an appeal to the European courts, and this will be submitted tomorrow,” Noonan said at the European Parliament in Brussels Tuesday.
A part of a wider EU campaign against corporate tax avoidance is the Bottom of Form
Apple decision followed a three-year probe the EU. Since the Apple case of tax fine and the state aid probes “threaten to undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the U.S. and the EU”, the U.S. Treasury Department put forward very strong reactions and criticized the Brussels-based watchdog’s state aid probes after the Aug. 30 decision in the Apple case.
The case was structured “in a way that it’ll be upheld” in court said the commission spokesman Ricardo Cardoso pointed to earlier comments by EU Competition Commissioner Margrethe Vestager. “That’s why it sometimes takes a long time to finish these investigations.”
There was no immediate comment from Apple for the media.
The decision on tax fines by the EU have been vowed to be fought in EU courts by Apple. There are appeals concerning tax arrangements that several EU nations granted to units of other multinationals, including Starbucks Corp. and the appeals will follow those already pending by Luxembourg – the Netherlands and Belgium.
In addition to the complexity of the cases apart from the EU court’s heavy workload, the appeals are expected to take several years. The EU’s top court, which will add at least another two years to the process for any ruling, which can be challenged one last time at the top court.
Tax ruling and their investigations “show that tax rulings are also sometimes used in other ways: to grant individual companies a benefit that’s not available to others” even while the vast majority of tax rulings they are analyzing “don’t give us any concern at all,” Vestager has said.
(Adapted from Bloomberg)