2024-09-10 13:11:38
Even for a company like Apple, 13,000,000,000 euros is a huge sum. This amount is kept in an escrow account and will remain there until the Irish tax revenue dispute is finally resolved. The foundation is a tax-saving model called the “Irish Double” that has been popular with American companies for decades. Apple used it until 2016. The EU Commission argued that this tax avoidance was illegal for thirteen years. The Supreme Court of the European Union (ECC) ruled against the EU Commission, which appealed. Today the European Court of Justice (ECJ) decided that the objection was justified.This means that it is far from certain that 13 billion euros will now be transferred to the Irish tax authorities and, to a lesser extent, to the EU budget. Instead, the legal debate is entering a new round. The ECJ’s decision means that the proposals will be reopened and that the ECJ will be a new hearing function. It is foreseeable that more years will pass before a new judgment is handed down.
The EU is suing Apple – and Ireland
A tax model called the “Irish Double” is said to have been used as a loophole for American companies as early as the 1990s. Sales, profits and license income are wisely divided between the two background company because it is difficult any tax sales rise – in Apple, at times, 0.005 percent. Since 2015, following EU intervention, Ireland is no longer allowed to offer this tax relief to newly registered companies. Existing companies, including the Irish Double Apple, receive a generous transition period of five years. The EU Commission argued that Ireland gave Apple illegal tax benefits between 2003 and 2016. It claimed that Ireland received 13 billion euros in back taxes from Apple. Apple and Ireland sued the European Court of Justice – and they proved provisionally right in 2020. This judgment was overturned by the ECJ.
Amazon and Starbucks are also involved
Similar procedures were carried out against Fiat Chrysler, Amazon and Starbucks – with mixed success: Fiat Chrysler had to pay the 30 million euros required according to the ECJ decision, Starbucks did not, Reuters reported. Amazon was also able to defend itself in court against an additional payment of 250 million euros.
Additional items:
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Effective tax rate of 0.005 percent – it’s over for Apple, “tax heaven” Ireland changes the rules
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EU taxes for large companies: plans to tackle fraud taking shape
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The EU is satisfied with the opening of NFC on the iPhone – antitrust regulations are suspended
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