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Apple Wins EU Court Case               07/15 06:52


   BRUSSELS (AP) -- A European Union court on Wednesday delivered a hammer blow 
to the bloc's attempts to rein in sweetheart tax deals between multinationals 
and individual member countries when it ruled that technology giant Apple does 
not have to pay 13 billion euros ($15 billion) in back taxes to Ireland.

   The EU Commission had claimed in 2016 that Apple had struck an illegal tax 
deal with Irish authorities that allowed it to pay extremely low rates. But the 
EU's General Court said Wednesday that "the Commission did not succeed in 
showing to the requisite legal standard that there was an advantage."

   "The Commission was wrong to declare" that Apple "had been granted a 
selective economic advantage and, by extension, state aid," said the 
Luxembourg-based court, which is the second-highest in the EU.

   The EU Commission had ordered Apple to pay for gross underpayment of tax on 
profits across the European bloc from 2003 to 2014. The commission said Apple 
used two shell companies in Ireland to report its Europe-wide profits at 
effective rates well under 1%.

   In many cases, multinationals can pay taxes on the bulk of their revenue 
across the EU's 27 countries in the one EU country where they have their 
regional headquarters. For Apple and many other big tech companies, that is 
Ireland. For small EU countries like Ireland, that helps attract international 
business and even a small amount of tax revenue is helpful for them. The net 
result, however, is that the companies often end up paying very low tax.

   The ruling can only be appealed on points of law and the Commission Vice 
President Margrethe Vestager said she was studying the judgment and will 
"reflect on possible next steps."

   The Irish government welcomed the ruling, saying "there was no special 
treatment provided" to the U.S. company. Apple also said it was pleased by the 
decision, arguing that the case is not about how much tax it pays, but in what 
country. Apple CEO Tim Cook had earlier called the EU demand for back taxes 
"total political crap."

   The defeat is especially stinging for Vestager, who has campaigned for years 
to root out special tax deals. Trump has referred to her as the "tax lady" who 
"really hates the U.S."

   Despite the setback, she vowed to carry on the fight. "The Commission will 
continue to look at aggressive tax planning measures under EU state aid rules 
to assess whether they result in illegal state aid," she said.

   The Eurodad network of 49 civil society organisations said that the ruling 
showed how tough any tax policy remains. ""If we had a proper corporate tax 
system, we wouldn't need long court cases to find out whether it is legal for 
multinational corporations to pay less than 1% in taxes," said Tove Maria 
Ryding of Eurodad.

   Even though taxation remains under the authority of its member countries, 
the EU is seeking to create a level playing field among the 27 nations by 
making sure special deals including ultra-low tax rates with multinationals are 
weeded out.

   Wednesday's ruling will hurt that.

   EU Greens legislator Sven Giegold said the verdict "is a huge setback in the 
fight against tax dumping in Europe. EU state aid rules are clearly totally 
insufficient to tackle the problem. This must be a wakeup call."

   The ruling comes at a time when tax income for EU nations is especially 
welcome because of the economic impact of the coronavirus pandemic. At a time 
when cash-strapped households are suffering, the EU wants to make sure 
multinationals making profits on the continent pay their fair share, too.

   "In times like these when we are passing multibillion-euro economic stimulus 
packages, we cannot afford to waste a single cent in tax revenue", said EU 
legislator Markus Ferber of the Christian Democrat EPP Group.

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