“[The European Commission] is effectively proposing to replace Irish tax laws with a view of what the commission thinks the law should have been…Using the commission’s theory, every company in Ireland and across Europe is suddenly at risk of being subjected to taxes under laws that never existed.” Apple CEO Tim Cook’s reaction above epitomizes the sentiment among leaders of many US multinationals who are collectively conveying a tone of disapproval and worry after the European Commission’s latest ruling on state aid claws back approximately €13 billion in historical tax benefits previously granted by Irish Tax and Customs to Apple. Apple paid an effective corporate tax rate of 1 percent on European profits in 2003, reduced to 0.005 percent in 2014. This decision by the European Commission adds to the list of recent rulings against Member States for affording preferential tax treatment for large multinationals, including Starbucks, Fiat and Amazon, on the basis of protecting European competition.
For more information on how transfer pricing policies could affect your business, please contact Ben Miller by calling 770.396.2200.