Apple and Ireland to challenge $14 billion European Union tax ruling

European Commissioner Margrethe Vestager, who brought the case against the iPhone maker, said Apple’s effective 2011 Irish tax rate was just 0.05 percent, despite it earning 16 billion euros there.

KitGuru Says: We’ve known about Apple and Ireland’s plans to appeal the EU’s tax ruling for a while but it seems that the ball is finally rolling.

Apple’s lawyer Bruce Sewell told Reuters the firm was a “convenient target” for the commission, because it generated lots of headlines.

CNN noted in their report that “The Irish government is afraid companies would be less likely to invest in Ireland if its tax regime changes, which could cost the country thousands of jobs”.

Apple Co.is angered towards Ireland as they had been asked to pay a tax budget of approximately £11 billion towards the country.

Tech giant Apple (NASDAQ:AAPL) is gearing up to battle the European Commission in court over a $14 billion tax charge. Ireland’s finance ministry said that the European Commission had “misunderstood the relevant facts and Irish law”. This was another point of contention for the Commission, which argued that Apple Sales International and Apple Operations Europe were subsidiaries that only existed on paper.

The company believes European Union “took unilateral action and retroactively changed the rules” to selectively target Apple, the rep said.

The Irish government today published the reasons it thinks that is not a very good reason for it to be the tax collector for the rest of the world.

“The Commission has exceeded its powers and interfered with national tax sovereignty”, it said.

In a separate statement Apple said it paid a 26 per cent tax rate on its worldwide earnings.

The Irish government has once more chimed in: It claims Apple’s local units shouldn’t be taxed for profits earned elsewhere since Apple’s products are designed and developed in the US rather than Ireland. The Commission not only didn’t attack that – didn’t argue with it, as far as we know – they probably didn’t even read it.

According to Bloomberg, Apple will officially have to pay back the takes within a matter of weeks, though the money will be held in escrow. “To do anything [other than appeal the Brussels decision] would be like eating the seed potatoes and destroying the future for people for short-term advantage now”, he said. Why is it, after all that the IRS is pursuing Amazon and Facebook through the U.S. courts over their European tax structures, but have never challenged Apple?

“The Commission breached the duty of good administration by failing to act impartially and in accordance with its duty of care”, Ireland’s Department of Finance said in a tersely worded statement Sunday.