Apple tax: ‘€13bn fine not politically motivated’, says EU competition commissioner

EU Competition Commissioner Margrethe Vestager

EU competition commissioner Margrethe Vestager has hit back at claims from Apple boss Tim Cook that the record €13bn fine was politically driven.

Ms Vestager insisted the commission’s competition division was independent.

“I know what we are obliged to do and that is to take decisions that are independent, based on the treaty, the facts of the case, and can be checked by the European courts,” she said. “We have a court practice that says quite clearly that state aid can come in many forms. In this case [it’s] as a tax benefit. The only politics of that is that we’re here to make sure the treaty is upheld and this is in the treaty.”

She also rejected Mr Cook’s view the commission’s accusation that the company paid 0.005% in 2014 was false. She said the commission had used figures supplied by Apple in US senate hearings in 2013.

US treasury secretary Jacob Lew said the commission’s decision involved monies that rightly was the property of the US.

“As the head of the US tax agency, I have been concerned that it reflected an attempt to reach into the US tax base, to tax income that ought to be taxed in the United States,” Mr Lew told think tank the Brookings Institution.

Asked whether US companies were being treated unfairly by the tax probes under Ms Vestager, Mr Lew said the US’s complaint was that the EU was “using a state-aid theory to make tax law”.

“We think it undermines the environment in Europe for international business because it creates uncertainty which ultimately will not be good for the European economy,” he said.

Apple, which employs about 6,000 people in Ireland, was one of the first companies caught up in the EU’s backlash against corporate tax-avoidance.

Apple tax: ‘€13bn fine not politically motivated’, says EU competition commissioner

The tech company has instructed ‘magic circle’ law firm Freshfields Bruckhaus Deringer to help fight its legal war with the EU over the €13bn tax bill.

The tech giant will appeal against the commission’s claim that it secured unfair tax deals in Ireland that amounted to state aid, having paid 1% tax on its European profits in 2003 and 0.005% in 2014.

The appeals process means Freshfields will represent Apple first in the EU’s General Court, and later in the Court of Justice if the initial appeal fails. Ireland and Apple have just over two months to appeal.

Considering the duration of cases brought by Starbucks and Fiat after similar tax deals with the Netherlands and Luxembourg, the process could take 18 months to three years before a definitive ruling is handed down from European courts.

The Department of Finance has confirmed that Philip Baker, a specialist lawyer in EU corporate tax law, will be representing the Government if it goes ahead with its own appeal.

In Europe, all eyes will be on upcoming rulings on the appeals launched by Starbucks and Fiat last year, which could set precedent for Apple’s legal battle.

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