The European Parliament is to debate the European Commission’s recent finding that Ireland granted Apple illegal tax benefits in a plenary session scheduled for this afternoon, discussing the findings of the investigation into two rulings which are deemed to have amounted to state aid
As a result of its investigation, the Commission has decided Ireland must recover some €13bn (£11bn) plus interest of taxes unpaid by Apple in Ireland for 2003 to 2014. Ireland is challenging this decision. Parliament will debate the issues at around 4pm on 14 September.
The Commission’s ruling has sparked discussion in the US about the need for corporate tax reform to discourage tax avoidance by US multinationals.
In an article this week for the Wall Street Journal, US Treasury secretary Jack Lew said: ‘Our current tax code is riddled with loopholes that allow corporations to artificially lower their tax bills by shifting income from higher-tax countries to low- or no-tax jurisdictions.’
The current US corporate tax rate is 35%, one of the highest in the world. It allows companies to defer taxes on offshore revenues until they bring them back to the US. The corporations may claim foreign tax credits against their tax bills in the US for any tax-related payments to EU countries.
Current estimates suggest US company hold more than $2 trillion (£1.52 trillion) in deferred overseas income.
In the wake of the Apple ruling, CEO Tim Cook has said the company will now repatriate an estimated $30bn of deferred taxes to the US Treasury, having previously stated on US television last December that while he would ‘love to’ do this he would not, ‘because it would cost me 40% to bring it home.’