Apple’s $16 billion tax trial will finally kick off this fall


What’s it like to have your startup bought by Apple? Stressful
An appeal of an EU ruling that Apple benefited from Ireland functioning as a tax haven will kick off this fall.
Photo illustration: Ste Smith/Cult of Mac

A court case to determine if Apple owes the European Union about €13 billion will begin in about six months.  The trial will determine if Ireland gave Apple illegal tax incentives.

The two are actually appealing a decision by the European Commission made in 2016 that Ireland is effectively a tax haven.

The EU is requiring Ireland to collect the money it says Apple owes, even during the appeal. The country’s finance ministry promises that the €13 billion ($15.92 billion) will be collected by the end of this year. It go into an escrow account, pending the EU’s final decision.

The emerald tax haven

European Competition Commissioner Margrethe Vestager decided in 2016 that a deal between Apple and Ireland was created solely for unfair tax avoidance.

Ireland offered the iPhone maker a low tax rate for putting its European headquarters in Cork.  In 2003, the tax rate was 1 percent. It was down to 0.0005 percent by 2014.

Vestager ruled that Apple owes additional taxes from 2003 to 2014. That’s the €13 billion Ireland is required to collect.

Ireland is fighting this because it risks losing its role as an EU tax haven. Amazon, Dell, Microsoft, Google, Facebook and many more put their European headquarters on the Emerald Isle to take advantage of its special tax rates.

Vestager’s job is to prevent exactly what Ireland is doing. Consistent corporate tax rates across the EU ensure companies don’t put all their facilities in tax havens, which harms the entire EU.

Irish Finance Minister Paschal Donohoe laid out this morning the expected schedule for this legal action, according to Politico.  “We expect the appeal is likely to begin in the autumn. How long the hearings will last will depend on the judges overseeing it.”