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What Apple’s appeal on EU’s $14B tax ruling means for the US

by AirTalk®

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A protestor dressed as Snow White (C) demonstrates outside the parliament buildings in Dublin in support of the EU ruling to take 13 billion euros ($15 billion) in taxes from Apple, the US tech giant on September 2, 2016. PAUL FAITH/AFP/Getty Images

CUPERTINO, Calif. (AP) - Apple is appealing a European Union order to collect a record $14 billion in taxes, following a similar appeal by Ireland.

The move comes about four months after EU competition authorities said Apple owed back taxes based on the way it reports European-wide profits through Ireland. Ireland charges Apple only for sales in its own territory, but the EU's Competition Commissioner says that arrangement let Apple report its Europe-wide profits at tax rates well under 1 percent. Apple claims the EU retroactively changed the rules and disregarded decades of Irish and U.S. tax law.

The U.S. position on the matter would be that Apple is a company earning revenue, so it should be taxed. But where? And if Apple is offshoring things in a way that’s illegal, should tax revenue go to the states? Who should taxes truly belong to if all Apple had in Ireland was shell corporations?


Edward Kleinbard, professor of law and business at USC, who focuses on domestic and international tax issues; he is also former Chief of Staff of the US Congress’s nonpartisan Joint Committee on Taxation

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