Most countries would be excited to be on the receiving end of $14.4 billion in unexpected tax revenues. But Ireland, which has become a European hub for American tech companies thanks to its friendly tax policies, announced today that it will appeal a decision by a European Court that would claw back that huge sum in tax subsidies from the world's wealthiest corporation, Apple.
The conflict pits the bureaucracy of the European Union against the sovereign governments of its member states. The European Commission has ruled that a number of nations were offering tax provisions to certain companies that were not accessible to rivals, creating an unfair and thus illegal system. An investigation found that Apple paid between 1 and 0.005 percent in annual taxes on its European profits between 2003 and 2014.
Ireland would prefer to keep these low rates, because that makes it an attractive place for American tech giants to open up shop and employ local citizens. Along with Apple, Google and Facebook have chosen Ireland for their European headquarters.
Apple has separately appealed the European Commissions decision, and the US Treasury even got in the mix, arguing that if the $14.4 billion belonged anywhere, it was back in Apple's home country. "It reflects an attempt to reach into the U.S. tax base to tax income that ought to be taxed in the United States," Lew said in a statement. The final outcome is likely still years away, as the court is already dealing with similar appeals from Luxembourg, the Netherlands, and Belgium.