Published: Tue, September 06, 2016
Economy | By Melissa Porter

US Treasury Chief Denounces Europe's Tax Ruling Against Apple

US Treasury Chief Denounces Europe's Tax Ruling Against Apple

Companies based in the US are subject to 35% corporate tax rate on global profits when they bring that money home, though they can also get tax credits for payments to foreign governments.

"When you are accused of something that is so foreign to your values, it brings out an outrage in you".

Apple has a deal with Ireland to locate much of its earnings there in return for creating jobs. He told the Irish Independent newspaper that the United States tech giant had not been given preferential tax breaks in Ireland.

However, according to The Irish Times, Vestager has refuted Cook's claims that there was a political motive behind the ruling.

"I have no idea where the number came from, it is not true", he said.

Ireland is now obliged to recover the unpaid tax from Apply for the years 2003-2014 which can amount up to €13 billion, plus interest. In a public letter to Apple customers on August 30, Cook wrote: "We are committed to Ireland and we plan to continue investing there, growing and serving our customers with the same level of passion and commitment". The head office has no base location anywhere and this resulted in their profits staying untaxed for years which greatly lowered their effective tax rate.

Apple CEO Tim Cook has claimed that the European Commission got its sums wrong in the investigation into the company's tax practices in Ireland, and has insisted that the firm pays its taxes lawfully and in full. Cook also sounded confident that the Irish government will appeal the ruling.

Speaking on Morning Ireland, Mr Cook said the European Commission's ruling that the tech giant owes Ireland €13 billion in back taxes is untrue.

US Treasury Chief Denounces Europe's Tax Ruling Against Apple
US Treasury Chief Denounces Europe's Tax Ruling Against Apple

In a separate interview with the Irish Independent, Cook said: "This conclusion that the Commission has reached has no basis in law or in fact".

Ireland has a long-established policy of using lower corporate tax rates to attract investment from multinational companies.

"I think we'll work very closely together, as we have the same motivation".

Apple is just the latest USA company to be targeted.

"This probe has been three years underway to make sure we really have a solid case, which I firmly believe we do".

While the EC has deemed the agreements as illegal state aid, Apple and Ireland have repeatedly said the company "follows the law".

Controversy has raged across the country on whether to pursue the unpaid tax and risk the wrath of multinationals, which the Irish economy depends heavily upon, or to fight the European Union finding.

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