Analysis: Lines drawn in €13bn Apple tax bill bust-up

The formal publication by the Commission and the formal rebuttal issued a few hours earlier by the Department of Finance shed little new light on the big €13bn bust-up over the disputed Apple tax bill.

Think of the statements as appealing to the public gallery, whereas the legal business will be about state-aid law for the European courts.

And nothing much is going to happen too quickly. 

The appeals by Ireland and Apple will trundle through the courts, while the €13bn in disputed tax stays locked up at the National Treasury Management Agency.

The positions of the combatants were entrenched when the Commission’s competition supremo Margrethe Vestager last August ruled to the effect the Revenue Commissioners had cut sweetheart deals with Apple, in 1991 and in 2007. 

The outcome was that by 2014 Apple was paying next to nothing — as little as 0.005% — on its European profits, according to the Commission’s ruling.

Much of the information on tax deals involving Ireland and Apple was laid bare much earlier. 

A US Senate sub-hearing in May 2013 was paradoxically soft on Apple CEO Tim Cook, but put Ireland in the frame as some sort of brass plate haven.

The Government was caught wrong-footed by the barrage of hostile headlines in the international press. 

Even for home consumption, its endless repetition Ireland only levied a 12.5% headline rate wore thin. 

Measures designed to scrap the stateless Irish company and the phasing out of the double-Irish accounting wheeze were quietly introduced in subsequent budgets.

Yesterday, the Commission detailed the charge sheet. 

Its ruling that Ireland had given preferential state aid to Apple rested on two tax rulings for Apple entities incorporated here, Apple Sales International and Apple Operations Europe.

The rulings “endorsed an artificial allocation of Apple Sales International and Apple Operations Europe’s sales profits to their ‘head offices’, where they were not taxed,” said the Commission.

“As a result, the tax rulings enabled Apple to pay substantially less tax than other companies, which is illegal under EU state-aid rules.”

Getting its retaliation in first, the Finance Department had rebutted the Commission’s decision, and again accused the Commission of invading the tax sovereignty of a member state.

The American Chamber of Commerce said it “was fully supportive” of the Government’s appeal. 

Oxfam, which has ranked Ireland as the world’s sixth most egregious tax haven, said “tax dodging has a real human cost”.

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