Breaking news in the European Union shows a stunning reversal of a high court’s ruling alleging that Apple got sweetheart tax deals from the nation of Ireland.
James Vincent at the Verge reports today that the General Court of the European Union has reversed a 2016 ruling by the European Commission that because Apple got paid less than 1% in taxes in Ireland in recent years, Apple’s arrangement with Irish officials constituted “illegal tax aid.”
Vincent’s reporting suggests that some have even accused Ireland of acting as a “tax haven” for Apple, a blue-chip company with an ever-upward share price now approaching $400.
However, in the recent ruling, the General Court of the European Union concluded that “the commission did not prove, in its alternative line of reasoning, that the contested tax rulings were the result of discretion exercised by the Irish tax authorities,” in the language of the court ruling itself.
Digging into the text of a GCEU press release, we see that the allegation in question stems from Apple activities and entities that its prosecutors describe as “incorporated in Ireland, but not tax resident in Ireland.”
That makes sense, according to the published response of Apple’s Tim Cook that the controversy over Irish taxes involves ‘not how much Apple pays, but where it pays.’
The debate over Irish treatment of the Apple corporation echoes many similar cases where antitrust regulators are trying to find out whether the unique tax systems of multinational businesses constitute favorability toward their massive business structures.
An outside observer could say that multinationals usually have some kind of tax hedging in place as a matter of course, and that it’s difficult to parse out what specific deals involve improper tax favors.
Meanwhile, in the United States, antitrust investigations into Google, Amazon and Apple are forthcoming. Pay attention as an investor, because these tech companies account for a significant portion of the U.S. stock market.