Ireland's Appeal Of The EU's Apple Tax Ruling Expected This Week

Apple Inc. AAPL, which is perpetually in the spotlight, now has one more reason to be in the news. Ireland is set to formally table its appeal against the multi-billion-euro fine imposed by the European Commission on the company in late August this year.

Irish Finance Minister Michael Noonan reportedly told a European Parliament Committee that the appeal would be submitted on Thursday, given his government's fundamental opposition to the European Commission's determination. In September, the Irish Cabinet said it would join forces with Apple in taking on the Commission's verdict.

The Case History

Following a three-year investigation, the European Commission has deemed that the Irish government has granted undue tax benefits of up to 13 billion euros to the U.S. technology giant. According to the Commission, the allowance is illegal and is against the spirit of the EU state aide rules, giving Apple the advantage of underpayment on taxes relative to other companies.

"Member States cannot give tax benefits to selected companies — this is illegal under EU state aid rules. The Commission's investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years. In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014," Commissioner Margrethe Vestager, in charge of competition policy, said in a statement.

Apple had said then it will fight the case.

Why Irish Heart Is Bleeding For Apple

Granted, the development would engender resentment in Apple and probably among its stakeholders, too. Why should Ireland take up cudgels on behalf of Apple? The logic is this: Ireland has vested interest in keeping multi-national companies on its shores and consequently is out to defend the tax regime that has lured many foreign companies into its soil with favorable tax deals. This in turn has kept the domestic economy chiming with more jobs and investment.

At time of publication, Apple was down 2.21 percent at $108.61.

Image Credit: By MaryG90 (Own work) [CC BY-SA 3.0 or GFDL] via Wikimedia Commons