Apple and Ireland go on offensive against EU’s $14B tax bill
HONG KONG (CNNMoney) – Apple and the Irish government are launching a two-pronged attack on the European Union’s record $14 billion ruling against their tax deal.
Ireland is accusing the European Commission, the EU’s executive branch, of meddling with its sovereignty by demanding that it recover €13 billion ($13.6 billion) in back taxes from the U.S. tech giant.
Apple, meanwhile, says European officials singled the company out as “a convenient target because it generates lots of headlines.”
Both parties are mounting legal challenges against the Commission’s decision in August, which said the Irish government had granted illegal state aid to Apple by helping the iPhone maker to artificially lower its tax bill for more than 20 years.
The Irish Finance Ministry blasted the Commission in a document published early Monday. It set out eight different ways it said the EU agency had gotten things wrong, including misapplying European law and failing to understand Irish law.
“The Commission has exceeded its powers and interfered with national tax sovereignty,” it said. The list of points summarizes Ireland’s main arguments in its appeal against the decision in the EU court system.
Apple delivered its own broadside against the ruling through an interview two top executives gave to the news agency Reuters that published around the same time as the Irish document.
“Apple is not an outlier in any sense that matters to the law. Apple is a convenient target because it generates lots of headlines,” said the company’s general counsel, Bruce Sewell.
He and Chief Financial Officer Luca Maestri detailed Apple’s plans for its own appeal of the decision in the EU court system, which the executives said the company plans to lodge this week.
Sewell said Apple will argue that the Commission’s investigation wasn’t thorough enough because it ignored the opinions of tax experts brought in by the Irish government.
The Commission said it “will defend its decision in court.”
The announcements from Ireland and Apple are the latest steps in their opposition to the EU ruling, which alleged that the U.S. company paid Irish tax of just 0.005% on much of its international profits in 2014.
Apple CEO Tim Cook had previously said the ruling had “no basis in fact or in law,” calling it “obvious targeting of Apple.”
The U.S. government also attacked the Commission’s decision at the time, saying it would transfer revenue from U.S. taxpayers to the EU and threaten foreign investment in Europe.
Ireland is desperate to avoid having to recoup the huge sum of back taxes from Apple, saying the U.S. tech giant already paid what it owed. The country has one of the lowest corporate tax rates in Europe, which makes it an attractive place for global companies.
The Irish government is afraid companies would be less likely to invest in Ireland if its tax regime changes, which could cost the country thousands of jobs.
Just last week, Oxfam ranked Ireland as the sixth worst corporate tax haven in the world, warning that a race to the bottom is “starving countries out of billions of dollars needed to tackle poverty and inequality.”