European Union finance ministers to discuss tax measures

European Union finance ministers to discuss tax measures

The meeting, which focused on looking into standardising tax rules for multinational firms, comes as the European Commission hopes to have proposals ready this autumn for tighter rules on tax bases for companies operating in the EU. Also, profits earned by Apple have not been repatriated from Ireland to the US.

He added that "it is simply untrue that Ireland provided favorable tax treatment to Ireland", and warned that "it is very damaging for our reputation to be called into question". "The law was applied fully and appropriately and Apple paid its taxes due in Ireland", he explained. "We don't want tax havens to remain unpunished", he said.

The Commission ruled that Ireland gave Apple a special deal on tax, with the iPhone maker paying as little as 0.005% on its profits in 2014.

"The story of the Apple investigation began in the United States.it was their investigation into Apple - and USA transparency rules - that tipped us off that the company might have received state aid", said Commissioner Margrethe Vestager, Europe's top antitrust official.

The press release highlights the facts contributing to what the EC perceives to be a lack of economic substance, but is largely silent regarding how preferential treatment was provided to Apple over other companies.

It was US Senators that tipped off the European Commission to unusual accounting practices at Apple which lead to its €13bn ($14.5bn) back-tax penalty. The Irish government feels that defending itself as a stable choice for substantive investment is crucial to its continued economic success.

Unpredictability for investors:S. Treasury secretary Jacob Lew criticized the EC ruling on Apple, and said it is an attempt "to reach into the USA tax base", the Wall Street Journal reports. While under double-taxation agreements, companies can offset United States taxes against taxes paid in an European Union country, if the European Union proceeds to demand US$19 billion in alleged unpaid taxes from Apple, the U.S. share of taxes from the company would be considerably diminished - if there is any tax left to collect at all. While comprehensive tax reform is clearly the most effective way to achieve this, such reform still faces many obstacles.

Pierre Muscovici says it's a "strange decision" that a country which has suffered like Ireland would turn down a 13 billion euro payment.

So, in the end, this confrontation between two allies in the tax campaigns against everyone else boils down to money. The Government will hold the recovery amount in escrow until the case has been concluded, as it may ultimately be returned to the company in the event of a successful appeal.

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