Taxes can be a tricky affair, especially for big companies. These companies strike a deal with any given country to use their infrastructure with the promise of providing employment to their people in exchange for it. There are times when such a company aims to save up on taxes and negotiates with the given country for the same. This is what happened with the Apple tax bill. More than a decade ago the tech giant got involved in a similar deal with the country of Ireland. Last year it was discovered that the deal was illegal. Now the European Commission is hell-bent on making the company pay the given taxes.
In August 2016, the European Commission made the announcement that Apple owed Ireland tax for the given deal worth billions. This was in relation to the fact that in a project by Apple in 1991, it received illegal state aid from Ireland. This is why the tech giant was ordered to pay the unpaid taxes. It has been more than a year since the announcement yet there has been no payment whatsoever. This is why the commission will now drag Ireland to court. The lawsuit will be in relation to the country’s inefficiency to recover taxes.
Will the Apple tax bill land Ireland in trouble?
This move by the European Commission is a smart one. Instead of taking legal action against the company in the case of the Apple tax bill, it is pressurizing Ireland to do so. Even after a year of the announcement, Ireland failed to recover even a part of the taxes. This is why the commission has decided to take legal action. A spokesperson from the commission also added that taking time to recover taxes is reasonable but there must be signs of at least some progress.
On making proper calculations about the taxes, the amount totals up to $15 billion. This clearly shows that the Apple tax bill is in big trouble. Ireland was given the deadline of 3rd January this year to recover them. Despite extending the deadline, there was no significant action by Ireland. This is why the European Commission is taking it to the European Court of Justice. This is considered the highest court in the EU. The Irish Government retaliated saying that this decision by the commission is absolutely unnecessary. This step is in order to set an example that tax loopholes are strictly unacceptable.