Apple's EU Tax Appeal this Week will take a Combative Stance stating that they were a 'Convenient Target'
Last week Patently Apple posted two reports covering Apple's EU Tax case titled "The Legislature of Ireland Invites Apple's CEO to Attend a Hearing to Respond to EU's €13 billion Tax Ruling" and "An In-Depth Report Covers the EU's 'Maxforce' Team that Ordered Ireland to Collect Billions of Euros from Apple." Today the story is front and center again as Apple is set to appeal the EU tax ruling this week. Right out of the gate Apple is saying that they were a 'convenient target' for the EU Commission.
Reuters reports today that "Apple will launch a legal challenge this week to a record $14 billion EU tax demand, arguing that EU regulators ignored tax experts and corporate law and deliberately picked a method to maximize the penalty, senior executives said.
Apple's combative stand underlines its anger with the European Commission, which said on Aug. 30 the company's Irish tax deal was illegal state aid and ordered it to repay up to 13 billion euros ($13.8 billion) to Ireland, where Apple has its European headquarters.
European Competition Commissioner Margrethe Vestager, a former Danish economy minister, said Apple's Irish tax bill implied a tax rate of 0.005 percent in 2014.
Apple intends to lodge an appeal against the Commission's ruling at Europe's second highest court this week, its General Counsel Bruce Sewell and Chief Financial Officer Luca Maestri told Reuters in an interview at the company's global headquarters in Cupertino.
Apple was singled out because of its success, Sewell said. "Apple is not an outlier in any sense that matters to the law. Apple is a convenient target because it generates lots of headlines. It allows the commissioner to become Dane of the year for 2016," he said.
While that could be seen as a very personal attack on Vestager, there's a context. Sewell was "referring to the title accorded by Danish newspaper Berlingske last month" according to Reuters.
Apple will tell judges this week that the Commission was not diligent in its investigation because it disregarded tax experts brought in by Irish authorities.
"Now the Irish have put in an expert opinion from an incredibly well-respected Irish tax lawyer. The Commission not only didn't attack that - didn't argue with it, as far as we know - they probably didn't even read it. Because there is no reference (in the EU decision) whatsoever," Sewell said. You could learn more about this in the full Reuters report here.
Apple said in a statement after filing its court appeal that "The EU took unilateral action and retroactively changed the rules, disregarding decades of Irish tax law, U.S. tax law, as well as global consensus on tax policy, that everyone has relied on," according to Bloomberg's report.
According to Monday's EU filing, regulators shrugged off claims that they weren't fair to Ireland and Apple during the probe. They argued they always respected their procedural rights and the subject matter of the investigation -- profit allocation methods used in tax rulings -- never changed.
Ireland had "ample opportunity" to express its views and "made use of that opportunity on multiple occasions," the EU said. While Apple only had the right to submit observations, it "was given and has effectively made use of the opportunity to submit" views to regulators on numerous occasions, according to the text of the EU decision.
CNN noted in their report that "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.
Representing the left wing's perspective on the matter, CNN added that "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."
The left always loves to pull out the violins and play the sad card. I'm surprised Oxfam didn't use inflammatory photos of starving childern screaming to make it's argument against Apple. Such testimonies and left wing propaganda has no place in a pure argument over taxes and in a way seems to make the EU's argument one based on emotion, the very thing that Vestager argued against originally.
In September, "Vestager sarcastically added that "We always have the courts to keep us in a straight line based on facts. The court won't hear political feelings, what's in your stomach. It wants the facts." Yes, let's keep focused on the facts, shall we.