EU's Vestager warns others, says Apple could cut bill

Thu Sep 1, 2016 9:08pm EDT
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By Alastair Macdonald and Foo Yun Chee

BRUSSELS (Reuters) - Other multinationals that do not employ as extreme Irish tax schemes as Apple Inc but shift profits via the country to tax havens could also be breaching EU rules, Competition Commissioner Margrethe Vestager said on Thursday.

She handed the iPhone maker a record 13-billion-euro bill for Irish registered units that Dublin authorities accepted were liable to tax in no country on Tuesday.

She told Reuters in an interview that other firms' arrangements, which involve routing profits to Irish-registered subsidiaries tax resident in places like Bermuda, might fall foul of the Commission on similar grounds.

"Taxes have been paid nowhere due to the Irish tax code," she said.

Asked if the bill would have been different if the head office of Apple's Irish unit been registered and paid tax in Bermuda, Vestager said: "not much."

Vestager said the core of the case against Apple was that it had an Irish registered company that booked most of the profits generated across Europe.

However, since Ireland didn't deem the subsidiary tax resident there, the unit was able to report just a small taxable income at an Irish "branch."

Apple's chief executive, Tim Cook, and Washington have denounced the Commission ruling as an unjust raid on tax that should be paid in the United States. Apple's chief financial officer, Luca Maestri, told reporters on Tuesday that the assertion that Apple doesn't pay taxes anywhere on much of its profits is "simply wrong."   Continued...

European Commissioner for Violation of EU Treaties Margrethe Vestager reacts during a news conference on the approval of the Hutchison-Vimpelcom deal at the European Commission in Brussels, Belgium September 1, 2016. REUTERS/Eric Vidal