For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails
Ireland's legal challenge to a European Commission ruling that Apple return billions in unpaid taxes will accuse Brussels of exceeding its powers.
The Dublin administration said the EU's competition watchdog had interfered with its sovereignty in finding that the tech giant enjoyed a special deal allowing it to pay 0.0005% tax in 2014 - 50 euro for every one million of profit.
Ireland is appealing against the order to recoup 13 billion euros and will argue that the Commission is attempting to rewrite Irish tax laws and that Apple's Irish subsidiaries paid all tax which was properly due.
A Department of Finance submission said: “The Commission has exceeded its powers and interfered with national tax sovereignty.
“The Commission has no competence, under State aid rules, unilaterally to substitute its own view of the geographic scope and extent of the member state's tax jurisdiction for those of the member state itself.
“The purpose of the State aid rules is to tackle State interventions which confer a selective advantage. The State aid rules by their nature cannot remedy mismatches between tax systems on a global level.”
The Commission's inquiry found that Ireland's treatment of Apple allowed the global brand to avoid taxation on almost all profits generated by sales in the entire European single market.
EU orders Apple to pay up to 13 billion euros tax to Ireland It said this was because Apple recorded all its sales in Ireland rather than in the countries where the products were sold. Ireland argues the important decisions within the Irish branch offices were made in the US so profits deriving from those decisions could not be attributed to Ireland.
Apple has had a base in Ireland since 1980 and employs 6,000 people.
Ireland has decided to appeal against the order that the iPhone maker pay back taxes. The country has structured its economy around attracting multinationals with its low corporate tax rate but left-wing critics have argued accepting the windfall could bring dramatic changes to national coffers during recovery from a recession.
Biggest business scandals in pictures Show all 20 1 /20Biggest business scandals in pictures Biggest business scandals in pictures Volkswagen emissions scandal VW admitted to rigging its US emission tests so that diesel-powered cars would looks like they were emitting less nitrous oxide, which can damage the ozone layer and contribute to respiratory diseases. Around 11 million cars worldwide were affected.
Getty
Biggest business scandals in pictures Martin Shkreli and Turing Pharmaceuticals Martin Shkreli became known as the “most hated man in the world” after his drug company, Turing, increased the price of a 62-year-old drug that treated HIV patients by 5,000% to $750 a pill. He was charged with illegally taking stock from Retrophin, a biotechnology firm he started in 2011, and using it pay off debts from unrelated business dealings. Shkreli, who maintains he is innocent, and says there is little evidence of fraud because his investors didn't lose money.
Biggest business scandals in pictures Panama Papers: Millions of leaked documents expose how world’s rich and powerful hid money - April 2016 Millions of confidential documents have been leaked from one of the world’s most secretive law firms, exposing how the rich and powerful have hidden their money. Dictators and other heads of state have been accused of laundering money, avoiding sanctions and evading tax, according to the unprecedented cache of papers that show the inner workings of the law firm Mossack Fonseca, which is based in Panama.
Getty
Biggest business scandals in pictures Google's tax avoidance Google reached a deal with the HM Revenue and Customs to pay back £130 million in so-called “back-taxes” that have been due since 2005. George Osborne championed the deal as a “major success”. But European MEPs have since called for the Chancellor to appear in front of the committee on tax rulings to explain the tax deal.
Getty
Biggest business scandals in pictures Rogue trader A French court cut the damages owed by rogue trader Jerome Kerviel from €4.9bn (£4.2bn) to just €1m (£860,000). The court ruled on that Kerviel was “partly responsible” for massive losses suffered in 2008 by his former employer Societe Generale through his reckless trades. Kerviel has consistently maintained that bosses at the French bank knew what he was doing all along.
AP
Biggest business scandals in pictures Barclays CEO under investigation for trying to identify whistleblower - Monday Paril 10 Authorities have launched an investigation into Barclays chief executive officer Jes Staley for trying to identify a whistleblower, the bank said on Monday. The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) are both investigating Mr Staley after the bank notified them that Mr Staley had tried to identify the author of two anonymous letters, which were sent to the board and a senior executive in June 2016.
Getty
Biggest business scandals in pictures UK to crack down on bank money laundering after reports of £65bn Russian scam, City minister says - March 2017 The Economic Secretary to the Treasury has vowed that the Government will crack down on money laundering practices, after several of the UK's biggest banks were accused of processing money from a Russian scam, believed to involve up to $80bn (£65bn).
Reuters
Biggest business scandals in pictures Former HBOS bankers convicted of bribery and fraud over £245m loan scam - February 2017 Two former HBOS bankers were among six people found guilty of bribery and fraud that cost customers and shareholders hundreds of millions of pounds, the BBC reports. Lynden Scourfield, 54, a manager at HBOS, forced struggling clients to use the services of his friends David Mills, 60, and Michael Bancroft, 73. In return, the two businessmen arranged sex parties, cash and lavish gifts. On Monday, the three were convicted at Southwark Crown Court on accounts including bribery, fraud and money laundering. Mark Dobson, another manager at HBOS, Alison Mills, and John Cartwright were also convicted.
Getty
Biggest business scandals in pictures Lloyds chief apologises for damage caused by affair allegations - August 2016 Antonio Horta-Osorio, the chief executive of Lloyds Bank, has broken his silence over allegations about his private life admitting he regrets any "damage done to the group's reputation". In a message sent to the bank's 75,000 employees, the banker said that anyone can make mistakes while insisting that staff had to maintain the highest professional standards.
Getty
Biggest business scandals in pictures Christine Lagarde faces court over £340m Bernard Tapie payment - July 2016 The head of the International Monetary Fund (IMF), Christine Lagarde, must stand trial in France over a payment of €403 million (now £340m, then £290m) to tycoon Bernard Tapie, a France's highest appeals court has ruled. The court rejected Ms Lagarde's appeal against a judge's order in December for her to stand trial over allegations of negligence in her handling of the affair. Ms Lagarde could risk a maximum penalty of one year in prison and a fine of €15,000 euros if convicted.
Reuters
Biggest business scandals in pictures HSBC senior manager arrested in FX rigging investigation at JFK airport in New York - July 2016 A senior executive at HSBC has been arrested at New York's JFK airport for his alleged involvement in a conspiracy to rig currency benchmarks, according to reports. Mark Johnson, global head of foreign exchange cash trading in London, was reportedly arrested on Tuesday. He will appear before a federal court in Brooklyn on Wednesday charged with conspiracy to commit wire fraud, Bloomberg said.
Getty
Biggest business scandals in pictures Former PwC employees found guilty in 'Luxleaks' tax scandal - June 2016 Two ex- PricewaterhouseCoopers staffers were found guilty in Luxembourg of stealing confidential tax files that helped unleash a global scandal over generous fiscal deals for hundreds of international companies. Antoine Deltour and Raphael Halet face suspended sentences of 12 months and 9 months and were ordered to pay fines of €1,500 (£1,230) and €1,000 (£822) for their role in the so-called LuxLeaks scandal. Despite the minimal sentences, the ruling was described by Deltour’s lawyer as “shocking” and “a terrible anomaly.” The ruling “puts on guard future whistle-blowers,” Deltour told reporters.The LuxLeaks revelations sped beyond Luxembourg, causing European Union regulators to expand a tax-subsidy probe and propose new laws to fight corporate tax dodging, while EU lawmakers created a special committee to probe fiscal deals across the 28-nation bloc.
Reuters
Biggest business scandals in pictures Goldman Sachs dealmakers lavished Libyan officials with prostitutes to win contract - June 2016 A former Goldman Sachs dealmaker trying to persuade Gadaffi-era Libya to invest $1 billion with the investment bank procured prostitutes and invited Libyan officials to lavish parties in the hope of winning the business, the High Court heard on Monday June 13.The Libyan Investment Authority sovereign wealth fund is suing Goldman Sachs for inappropriately coercing its naïve staff into giving its sovereign wealth fund cash to the bank to invest in products they did not understand. The products were designed to generate big profits for Goldman, the LIA claims.Goldman denies wrongdoing and says the LIA was treated as an arms-length customer
Reuters
Biggest business scandals in pictures Former boss of BHS said his life was threatened - June 2016 Darren Topp, the former boss of BHS, has said former owner Dominic Chappell threatened to kill him when he challenged him over a £1.5 million transfer out of the business. MPs on the Business, Innovation and Skills Committee asked Mr Topp about a £1.5 million transfer Mr Chappell made from BHS to a company called BHS Sweden.
Getty
Biggest business scandals in pictures Sports Direct founder Mike Ashley admits paying workers below the minimum wage - June 2016 Mike Ashley admitted paying Sports Direct employees below the minimum wage at a hearing in front of MPs. The company founder said that workers were paid less than the statutory minimum because of bottlenecks at security in an admission that could result in sanctions from HMRC.
Reuters
Biggest business scandals in pictures Mitsubishi admits ‘improper’ fuel tests - April 2016 Mitsubishi has admitted to using false fuel methods dating back to 1991. The scale of the scandal is only just coming to light after it was revealed in April that data was falsified in the testing of four types of cars, including two Nissan cars.
AP
Biggest business scandals in pictures Quindell, the scandal-ridden insurance firm Quindell was once a darling of AIM but its share price fell in April 2014 when its accounting practices were attacked in a stinging research note by US short seller Gotham City. In August the group was forced to disclose that the £107 million pre-tax profit it had reported for 2013 was incorrect, and it had in fact suffered a £64million loss.
Getty
Biggest business scandals in pictures Toshiba Accounting Scandal The boss of Toshiba, the Japanese technology giant, resigned in disgrace in the wake of one of the country’s biggest ever accounting scandals. His exit came two months after the company revealed that it was investigating accounting irregularities. An independent investigatory panel said that Toshiba’s management had inflated its reported profits by up to 152 billion yen (£780m) between 2008 and 2014.
Biggest business scandals in pictures FIFA Corruption Scandal Fifa, football's world governing body, has been engulfed by claims of widespread corruption since the summer of 2015, when the US Department of Justice indicted several top executives. It has now claimed the careers of two of the most powerful men in football, Fifa President Sepp Blatter and Uefa President Michel Platini, after they were banned for eight years from all football-related activities by Fifa's ethics committee. A Swiss criminal investigation into the pair is ongoing.
Getty
Biggest business scandals in pictures Libor fraudster City trader Tom Hayes, 35, has become the first person to be convicted of rigging Libor rates following a trial at London's Southwark Crown Court. Hayes worked as a trader in yen derivatives at UBS before joining the American bank Citigroup in Tokyo. He was fired from Citigroup following an investigation into his trading methods. He returned to the UK in December 2012 and was arrested following a two-and-a-half year criminal investigation by the SFO.
Getty
The Department of Finance in Dublin published its legal arguments on Monday.
It said: “The Commission never clearly explained its State aid theory during the investigation, and the decision contains factual findings on which Ireland never had the chance to comment.
“The Commission breached the duty of good administration by failing to act impartially and in accordance with its duty of care.”
It also said:
The Commission had misapplied State Aid law and Apple's Irish subsidiaries did not pay any less tax than was properly due. Europe's reasoning misunderstood Irish law. The Commission failed to act impartially and in accordance with its duty of care. It invoked alleged rules of EU law never previously identified and failed to provide proper reasons for its decision. PA
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies