EU president Jean-Claude-Juncker defends Apple tax judgment

It's not "total political crap", argues EU president Juncker

European Commission president Jean-Claude Juncker has defended the Commission's demand that computer giant Apple pay €13bn in back taxes to the Irish government.

The demand was made last week by the European Commission following an investigation that lasted more than two years. It ruled that the level of corporation tax that Apple was paying in Ireland amounted to an illegal subsidy. It channels all its sales across the EU via its Cork, Ireland head office to minimise the amount of tax it pays.

Apple CEO Tim Cook - the company's former chief financial officer - has blamed US-EU politics for the ruling, but the EU president has argued that the ruling was based on "facts and existing rules" and wasn't political, as Cook had implied.

The European Commission, he added, had largely focused its tax-related investigations on European companies, rather than US ones, and the Apple judgment simply enforced current regulations.

Juncker was speaking in a bid to assuage fears articulated by US politicians that Apple and other high-profile US multinationals were being singled out by the European Commission.

Indeed, Apple argues that its tax affairs in the EU have been entirely legal and legitimate, and that the EU could put at risk inward investment. CEO Cook claims that the EU has got its sums wrong and drastically under-estimated the level of tax that the company pays in corporation tax in Ireland.

He also rejected claims that Apple had any kind of special deal with the Irish government. "The opinion [of the European Commission]... alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law.

"We never asked for, nor did we receive, any special deals. We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don't owe them any more than we've already paid," that company claimed in an open letter published in response, following the judgment.

Apple isn't the only multinational company that, it is claimed, enjoys beneficial tax arrangements with national governments in the European Union. Both Amazon and café chain Starbucks are also being investigated by the European Commission over the way in which they structure their affairs in the EU in order to minimise tax.

It is claimed that Starbucks, for example, minimises its tax liabilities across the EU by selling image rights and raw materials via a low-tax subsidiary in Luxembourg. This enables the company to shift its tax liabilities from high tax countries, such as France, to Luxembourg. Amazon is also based in Luxembourg.

Ironically, perhaps, when Juncker was prime minister of Luxembourg, his government wooed multinational businesses to establish their EU head offices in the Grand Duchy, using its advantageous tax rules as a key selling point.

Amazon, meanwhile, has been accused of underpaying taxes for more than a decade.