Apple logo is seen on the Apple store at The Marche Saint Germain in Paris, France July 15, 2020. REUTERS/Gonzalo Fuentes

THE NEUTRAL ZONE

Apple Inc. emerged victorious on Wednesday with the overturning of a European Commission mandate for the tech giant to pay $14.9 billion in back taxes to the Irish government.

The Europen Union’s General Court reversed the Commission’s decision because it said there was not enough evidence to show that Apple had arranged an illegal agreement with Irish authorities that allowed the tech company to pay an effective corporate tax rate of 1% down to .005% from 2003 to 2014. The Commission had ordered the back payments in 2016, which Apple and Irish authorities appealed. The European Commission will have 14 days to appeal the decision with the EU’s Supreme Court.

The decision follows a series of concerted efforts by the European Commission to enforce competition restrictions on big tech companies in addition to Apple, such as Google and Amazon. Margrethe Vestager, who is its top enforcer of antitrust regulations with the EU, unveiled a package of initiatives in early July to force tech giants to pay more taxes and take more responsibility for illegal content on their platforms. Experts say that more European regulation of digital industries would likely spread to other countries around the globe, in the same way that the EU’s data privacy law, the General Data Protection Regulation, was mimicked in the state of California as the California Consumer Privacy Act.

While the overturning of the Apple decision was not a victory for Vestager or the Commission, some say it will draw attention to EU member taxing laws and their abuse by large tech companies. The spotlight on Big Tech taxation in Europe has also grown due to the COVID-19 pandemic, which will stretch government coffers and push authorities to seek new sources of revenue. 

Apple spokesperson Josh Rosenstock praised the decision on Wednesday, telling the New York Times that the case “was not about how much tax we pay, but where we are required to pay it.” In the initial back tax ruling, Apple officials called the 1% tax rate cited by European regulators “a completely made-up number.” Irish officials similarly applauded the decision, touting it as a win for the country’s reputation on corporate tax and a defense of its right to independently establish its own taxing policies.

MEDIA PERSPECTIVE

Apple Just Dodged an £11.6 Billion Tax Bill – Vice UK – 7/15/2020
Dutch MEP Paul Tang described the ruling as “unfair”, saying: “I suspect that many people in Ireland think, ‘Why is there a company that pays 0.05 percent in taxes?’ I pay more taxes than Apple, for that matter. Many people pay more taxes.”

EU court decision settles €13bn question: Apple’s money was never ours to tax – The Irish Times – 7/15/2020
Sometimes legal judgments do fall into line with common sense. When the European Commission announced in 2016 that Apple owed the Republic €13 billion in back tax, the general reaction here was, “ that’s mad, Ted”, followed by a string of media listings on what this amount of money could buy us. But the EU’s general court has decided in the most unequivocal terms that the Commission got it wrong. And while the details are complex – this is tax, after all – the essence of it is simple. The court decided that this was never Ireland’s money to tax in the first place.

A response to the European court’s bad Apple ruling. Tax Justice Network – 7/15/2020
Today’s Apple decision confirms that the European Union’s rules against state aid are not up to the job of preventing EU member states operating as tax havens. Powerful tax justice reforms are needed, rather than broader application of state aid rules. Neither the EU nor any other countries will be able to raise the revenues needed to invest in health services and to fight the pandemic, if the scourge of corporate tax abuse is not challenged head-on.

EU plans tax overhaul to shore up post-lockdown economy – euronews – 7/15/2020
Brussels wants to introduce a string of measures to cut down on corporate tax evasion and help shore up the economic recovery. It aims to: remove obstacles to registering, declaring and paying tax; use new technologies to increase compliance and cut red tape; extend EU tax transparency rules to online platforms to make sure that they pay their fair share; reform the tax code of conduct; and tackle harmful tax practices in the EU. The announcement came on the day Brussels suffered a setback when a court rejected a European Commission demand that Apple pay €13 billion in Irish back taxes.

INFLUENCER PERSPECTIVE

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