A ruling is expected on Wednesday that will determine if Apple owes the Irish government €13B ($14.8B) in unpaid taxes. However, a new report from Independent.ie (via 9to5Mac) says the Irish government feels that it faces a losing proposition no matter which way the verdict goes.
Apple has always funneled all of the revenue for its European Union sales through its European headquarters in Ireland. Apple likely selected the country due to its quite low rate of corporation taxes when compared to other EU countries (12.5%). The Irish government offered Apple an even better deal that meant the Cupertino firm paid even less in taxes.
The EU later ruled that the deal between Apple and Ireland was illegal. While Ireland was actually found to have broken the law, Apple is still on the hook for what the EU considers unpaid taxes.
With the ruling that’s due on Wednesday, Irish officials feel they lose no matter which way the verdict goes. If Apple wins, Ireland will lose out on the tax payment windfall. However, if the EU wins, Ireland may not get to keep the €13B windfall, and it also loses an attractive lure that it could use to attract other companies to the country.
If the judges of the EU’s general court rule in favour of the European Commission, Ireland could be in for a significant tax windfall.
However, other EU countries may well line up for a share of the €13bn arguing that it relates to economic activity by Apple inside their jurisdiction.
But Government ministers fear this could be a short-term gain and jeopardise the future of lucrative multinational investment and job-creation in Ireland.
No matter which way Wednesday’s verdict goes, the losing side is expected to file an appeal to the European Court of Justice.
