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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?

Guest:

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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