Premarket: Apple is Irish green with $14.8B tax win

apple premarket green tax winFrom WSJ.com’s “Apple Wins Major Tax Battle Against EU” ($) posted early Wednesday:

Apple Inc. won a major battle with the European Union, when the bloc’s second-highest court on Wednesday sided with the U.S. company over a €13 billion ($14.8 billion) tax bill that EU antitrust officials had said the company owed to Ireland.

The case stems from a 2016 decision by the European Commission, the bloc’s top antitrust enforcer, which said that Ireland must recoup €13 billion in tax breaks from between 2003 and 2014, money the commission said constituted an illegal subsidy under the bloc’s strict state-aid rules.

But in its judgment on Wednesday, the General Court said it annulled the commission’s decision because it had failed to meet the legal standards in showing that Apple was granted an illegal subsidy.

My take: More on the decision later. Meanwhile, Apple could be testing $400 again today.

See also: Should the New York Times give back its Apple Pulitzer?

9 Comments

  1. Jonny Tilney said:
    As predicted, this now looks to be another example of unelected bureaucrats wasting resources and member States’ money.

    3
    July 15, 2020
  2. Bart Yee said:
    IMO, the tax grab by the EU was always a money driven exercise in trimming off funds from American companies that used legally approved, nee encouraged, programs that were used by EU nations to entice business and financial investment to their respective nation states. The EU was perfectly happy to reap the benefits when times were good, but when their economies went south, immigration issues reared up, Brexit began looming, and persistent economic problems with Greece, Spain, Ireland, France, Italy, etc., IMO the EU was willing to change the rules to suit their need for more cash. I don’t doubt there was an element of jeolousy regarding big bad American Apple, it’s success, and it’s deft understanding and execution of international corporate tax law. The fact that Apple products were “expensive” but purchased by many EU citizens and also vanquished Nokia and Ericsson previously should not be overlooked.

    I truly hope Apple fights back the inevitable EU appeal to the Supreme Court equivalent and end this particular issue. The looming EU digital tax is also, IMO, another similar tax and money grab against successful multinational American companies to prop up the EU because it is aimed solely at the largest and most successful of those companies.

    5
    July 15, 2020
    • Jerry Doyle said:
      @Bart Yee: Good analogy. Spot on. The only other factor I would add to your insightful analogy is the political ambition behind Commissioner Margrethe Vestager that drove her to use State Aid rules to go after tax avoidance in the EU. Of course, going after the world’s largest and most respectable branded company also was a public attention grabber to further her political ambitions. She probably did irreparable damage to herself now.

      0
      July 15, 2020
  3. Bart Yee said:
    Too bad Apple transferred $15B USD into it tax case escrow account instead of transferring an equivalent $15B worth of AAPL stock. By my reckoning, that Sept. 2018 transfer was worth about $223/share average or about 67,264,574 shares. Today that would be worth $26.1B in appreciated AAPL stock. IMO, the EU should compensate Apple for the loss of the use of its own money.

    3
    July 15, 2020
    • Jacob Feenstra said:
      Given the rate at which Apple can borrow, I don’t think that would have made much of a difference. Maybe they would have bought back more stock, but I doubt it. Sacto Joe, our in-house expert on buybacks can give his perspective.

      Anyway, I’m really happy with the win as my European blood was boiling a little on this one when this came up some years ago. The legal team likely drank some champagne.

      1
      July 15, 2020
  4. Gary Morton said:
    Maybe Vestager will become less imaginative when fabricating bogus legal theories as she attempts to rewrite laws after the fact….probably not though. Political crap has gotten her to where she is.

    2
    July 15, 2020
    • Jerry Doyle said:
      @Gary Morton: I believe your former perception is more likely. These types of losses involving huge amounts of tax payers resources if better deployed for needed oversight elsewhere have a deleterious effect on one’s viability in office and furtherance of political ambition.

      0
      July 15, 2020

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