Business World

Thursday 19 July 2018

European court blocks US government from Apple tax case

Commissioner Margrethe Vestager at a news conference on Ireland’s tax dealings with Apple at the EC in 2016. Photo: Reuters
Commissioner Margrethe Vestager at a news conference on Ireland’s tax dealings with Apple at the EC in 2016. Photo: Reuters

Stephanie Bodoni

The United States government has lost a bid to join Apple's court fight against the European Union order that the tech giant must pay Ireland a record €13bn tax settlement.

The EU's highest court yesterday rejected the US request, its press service announced on Twitter. A lower court had dismissed the request in December, saying the American government failed to show it had a direct interest in the result of the state-aid case.

In August 2016 the European Commission ordered Ireland to recoup the record €13bn plus interest, saying the world's richest company had been handed an unfair advantage due to its historic tax treatment in Ireland. The Government, which had been found to have provided the aid, as well as Apple, appealed against the ruling.

Last year, the US asked the EU court for permission to intervene in Apple's case, arguing that the outcome of the case could affect its economic situation due to the tax credits the iPhone maker could claim back in America as a result of paying more taxes in Ireland.

Any tax paid by Apple in Europe can be deducted from the tax bill in its home, US market.

The EU's Apple order has reverberated across the Atlantic, triggering criticism from the US Treasury that the EU was making itself a "supra-national tax authority" that could threaten global tax reform efforts. The text of yesterday's courts decision wasn't immediately available.

Apple representatives in London didn't immediately respond to a request for comment.

Appeals over tax cases have been piling up at the EU's courts since 2015, when the Commission issued its first orders against Luxembourg and the Netherlands to recoup unpaid taxes from a Fiat Chrysler cars unit and Starbucks respectively.

The EU has also ordered Luxembourg to recover €250m from Amazon and Belgium to get back as much as €700m from 35 companies, including Anheuser-Busch.

At stake in all these decisions are billions of euro that multinational companies have squirrelled away in tax havens, out of the reach of authorities in the countries where they make most of their sales.

With no court hearings in sight yet, the EU has been continuing its investigations, including those into the tax affairs of McDonald's and Engie SA in Luxembourg.

Bloomberg

Irish Independent

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