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Ireland Prefers Not to Collect Apple Inc. (AAPL) Taxes: Here’s Why

Apple Inc. (NASADAQ:AAPL)

Apple Inc. has been in trouble for quite some time now after the European Commission issued orders for Ireland to recover back taxes from the Cupertino-based giant. The clouds of trouble over Apple seems to be fading away now as the Finance Minister of Ireland, Mr. Michael Noonan, informed on Tuesday that the government will formally submit its appeal against the EC demand, notes The Verge.

Ireland protecting its image

Previously, The EC issued orders to Ireland to make the US firm pay up to 13bn Euros to Dublin after it ruled that the state had offered illegal aid to the firm. Dublin’s tax regime has helped it attract many multinational brands, and now it is making an attempt to protect it.

Apple Inc. (NASDAQ:AAPL) Store

Speaking to a European Parliament committee in Brussels, Nooman said, “The government fundamentally disagrees with the European Commission’s analysis and the decision left no choice but to take an appeal to the European Courts and this will be submitted tomorrow.”

Theoretically, Ireland would benefit from the extra tax revenue, but doing this would mean scaring away other multinational names, who might be interested in running operations in the country. This would also lead to loss of job opportunities that the companies would create in Ireland.

Apple got a preferential treatment  

The European Union – in an investigation – found that on the profits that Apple made between 2013 and 2014, it paid between 1 and 0.005% in annual taxes only. Following this, the EC ruled that offering tax provisions to certain companies that were not accessible to rivals leads to a creation of an unfair and illegal system.

However, it is in the interest of Ireland to keep these low rates. It is for this reason only major names such as Facebook, Apple and Google have chosen Ireland for their European headquarters. Apple Inc. has also appealed the EC’s decision separately.

Washington, which is also pissed off with the EC’s decision, says the tax revenue should go to the US rightfully and EU is trying to grab it. The iPhone maker took utmost advantage of its Irish tax situation for funneling billions in international revenue. This way, it saved a lot of money that it would have otherwise paid to the host country.

Netherlands, Luxembourg and Belgium too have been found guilty of offering tax deals to some companies, and neglecting the rivals. They offered benefits to companies such as Starbucks and Fiat Chrysler. Those parties too have put forward an appeal, but they will likely have to wait for years before they get a resolution. And probably, the same applies to Apple Inc. and Ireland.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.