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Irish govt, Apple says to appeal EU tax ruling

Xinhua, August 30, 2016 Adjust font size:

After the European Commission (EC), the executive arm of the European Union (EU), ruled that Ireland must demand back taxes from Apple of about 13 billion euros(14.5 billion U.S. dollars), both the Irish government and the U.S. tech firm vowed on Tuesday to appeal the ruling.

"The decision leaves me with no choice but to seek cabinet approval to appeal the decision before the European Courts," Irish Finance Minister Michael Noonan said in a statement.

"This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state aid rules into the sovereign member state competence of taxation," he said.

"I disagree profoundly with the Commission's decision. Our tax system is founded on the strict application of the law, as enacted by the Oireachtas (Irish parliament), without exception," he added.

Meanwhile, Apple said in a statement it will appeal the ruling and is "confident the decision will be overturned."

"The Commission's case is not about how much Apple pays in taxes, it's about which government collects the money," it said.

Earlier, the EC ruled that Ireland granted undue tax benefits of up to 13 billion euros to Apple, saying that "selective treatment" allowed Apple to pay tax rate of 1 percent on EU profits in 2003 down to 0.005 percent in 2014.

The findings are a result of the culmination of a three-year investigation by Competition Commissioner Margrethe Vestager into tax arrangements for Apple, dating back 25 years.

In a statement, the EC said the benefit is "illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. Ireland must now recover the illegal aid."

At the center of the Apple controversy are two of the company's subsidiaries, Apple Operations Europe and Apple Sales International, according to local media.

These firms were registered in Ireland, however, they were controlled in the United States where they held their board meetings. Revenue taxed the companies on the basis of their activities in Ireland, however, the EC says both companies should have been taxed by Ireland on the basis of their worldwide income. Endit