Apple, EU tile 13 billion. And the White House raises the barricades – The Messenger

BRUSSELS
It is a record that yesterday the European Commission has complained to Apple for unlawful State aid: 13 billion plus interest for having benefited from a favorable legal treatment in the course of 11 years, due to an administrative decision Ireland that has allowed the US giant to pay also 0.005% tax on profits in Europe and elsewhere. “It is not a fine: they do not pay taxes that must be paid,” said Competition Commissioner, Margrethe Vestager, presenting a decision which has raised strong reactions in Dublin, Washington and Cupertino. The Irish Government and Apple have announced their intention to appeal against the European Antitrust.

The White House said it was “concerned about the unilateral approach.” According to the US Treasury, “the Commission’s actions threaten to undermine foreign investment, the business climate in Europe and the important spirit of economic cooperation between the US and EU”.

REACTIONS
 The CEO of Apple, Tim Cook, wrote a letter, stressing that the decision “will have profoundly negative effects on investment and the creation of jobs in Europe.” With a paradox: “We are ordered to retroactively pay additional taxes to a government that says that we do not have anything more than we already paid for,” said the successor to Steve Jobs. The Apple of the Commission’s decision is yet another in a long line on the tax benefits granted by some Member States (Luxembourg, the Netherlands and Belgium) to the multinationals through tax ruling (the administrative decisions which predetermine the amount of taxes that a company is required to pay, ed). But so far the amount of illegal aid claimed to companies like Amazon, Starbucks and Fiat was limited to a few tens or hundreds of millions. The 13 billion claimed Apple is an absolute record in the decisions on State aid, well beyond the 1.4 billion that the French electricity giant EDF has had to return to France last year. And ” a clear signal, “said Vestager: ‘Member States may not grant unfair tax advantages to selected companies, whether European or foreign, whether small or large,” said Vestager, noting that in 2014 Apple has paid just 50 euro for each million EUR of profit.

the investigation focused on two of Apple recorded in Ireland – Apple Sales International and Apple Operations Europe companies which had concluded two tax ruling with the authorities of Dublin to determine the taxable profits. Much of the profits were charged to the “headquarters” that existed only on paper: there were not “employees and offices and the activity was sporadic,” he insisted Vestager. By contrast, the Irish subsidiary that carried out the actual sales operations throughout Europe, the Middle East, Africa and India recorded very few profits, taxed on the basis of very low Irish tax rate (12.5%). In 2011 to 16 billion in profits made by Apple Sale International, less than 50 million have been attributed to its Irish subsidiary, while “the rest was not taxed,” said Vestager.

PROCEDURES
 Before ending up in the coffers of the Irish government, 13 billion should end in a blocked account pending the outcome of proceedings before the European Court of Justice in a process that could take longer than five years. The figure could be reduced if other countries were to impose Apple to pay more taxes on gains registered by the multinational. In his letter, Cook has accused the Commission of having dealt “a devastating blow to the sovereignty of the Member States on tax issues and the principle of legal certainty in Europe.”