The Irish government agreed Friday to appeal a record $US14.5 billion ($19.2 billion) European ruling against Apple's tax practices in the country, as tensions mount over whether the technology giant paid a sufficient amount on its global operations.
The move comes despite increasing division among Irish ministers over whether to appeal the ruling issued by Europe's competition authorities.
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Cook calls EU ruling 'political crap'
Apple CEO Tim Cook also said his company was targeted by EU regulators.
Several lawmakers have questioned such a move, given that the tax penalty is equivalent to what the country pays annually to fund its national health care system. That debate has intensified since Ireland has faced almost a decade of austerity after the financial crisis.
Despite the tension, the Irish government unanimously backed the appeal against the tax ruling, though the country's Parliament will be reconvened Wednesday to debate the decision.
"I believe that there are some very important principles at stake in this case and that a robust legal challenge before the courts is essential to defend Ireland's interests," Michael Noonan, Ireland's finance minister, said in a statement Friday.
A review of the country's corporate tax system will also be held to evaluate the complicated structures that multinational companies in Ireland often use to reduce their overall tax obligations. The review, whose details will be outlined in the coming days, will not look at the country's 12.5 per cent corporate tax rate, one of the lowest in the West.
"We need to ensure that Ireland's corporation tax code meets these new standards while remaining competitive," Noonan added, in reference to a push by governments worldwide to crack down on complex practices used by companies to reduce their overall tax payments.
The Irish government's decision comes a day after Tim Cook, Apple's chief executive, said that the tech giant would also appeal the European Commission's ruling, which argued that Ireland had given Apple preferential treatment.
![The Irish government's decision comes a day after Tim Cook, Apple's chief executive, said that the tech giant would also ...](/web/20160903110002im_/http://www.smh.com.au/content/dam/images/g/i/3/y/p/y/image.related.articleLeadwide.620x349.gr7y7e.png/1472845225898.jpg)
Cook, in an interview with the Irish broadcaster RTE, said Europe's tax clawback was politically motivated, "maddening" and would be overturned on appeal.
"The finding is wrongheaded," Cook told RTE. "It's not true: There wasn't a special deal between Ireland and Apple."
!["All of us benefit when businesses pay their fair share of tax.": Europe's top competition official, Margrethe Vestager.](/web/20160903110002im_/http://www.smh.com.au/content/dam/images/g/r/7/y/7/q/image.related.articleLeadwide.620x349.gr7y7e.png/1472845225898.jpg)
A spokeswoman for Apple declined to comment.
This week's ruling over how Ireland treated Apple and its tax practices has led to an increasingly bitter debate between Margrethe Vestager, Europe's top competition official, and those who argue that her agency has overstepped its remit. Many have claimed that the commission does not have the right to review national tax rules, and that it should not retroactively decide on how certain tax practices should work.
Talking at a tax conference in Denmark on Friday, Vestager defended the recent ruling, saying that any country that gave a company preferential tax treatment was the same as a politician handing out a "bundle of cash."
"All of us benefit when businesses pay their fair share of tax," she said. "It's not in the interest of the individuals and businesses who do pay tax, if others aren't paying their share."
The appeals by the Irish government and Apple are expected to last years. Cook has said the tech giant will set aside money - based on the calculations of Apple's back taxes - in an escrow account if the court eventually sides with the commission.