Apple will have to pay up to 13 billion euros ($14.5 billion) plus interest in back taxes to Ireland after the European Union found Tuesday that the U.S. technology giant received illegal tax benefits over 11 years.
The ruling is the biggest salvo in the EU executive Commission’s battle to have multinationals pay their fair share in the region. The EU alleges that many big companies struck deals with EU countries to pay unusually low tax in exchange for basing their EU operations there.
EU Competition Commissioner Margrethe Vestager said that a three-year investigation found Ireland granted such lavish tax breaks to Apple that the multinational’s effective corporate tax rate on its European profits dropped from 1 percent in 2003 to a mere 0.005 percent in 2014.
That last tax rate meant that for each million euros in profits, Apple paid just 50 euros in taxes, Vestager told a news conference.
“Member states cannot give tax benefits to selected companies_this is illegal under EU state aid rules,” Vestager said.
“Ireland must now recover the unpaid taxes in Ireland from Apple for the years 2003 to 2014 of up to 13 billion euros ($14.5 billion), plus interest,” the Commission said in a statement.
Apple said in a statement that it had followed the law and paid every cent of the taxes it owed. It said it would challenge the EU action in the European courts, and predicted it would be vindicated.
The Irish government denied granting favorable fiscal treatment to the maker of the iPhone and other consumer electronics products, computer software and online services. “Ireland’s position remains that the full amount of tax was paid in this case and no state aid was provided,” the Irish statement said. “Ireland does not do deals with taxpayers.”
Apple accused the EU executive body of engaging in efforts “to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process.”
“The Commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money,” the company said in a statement. “It will have a profound and harmful effect on investment and job creation in Europe. Apple follows the law and pays all of the taxes we owe wherever we operate. We will appeal and we are confident the decision will be overturned.”
The Irish finance minister, Michael Noonan, said he would seek approval from the Irish Cabinet to legally challenge the EU Commission’s ruling.
“It is important that we send a strong message that Ireland remains an attractive and stable location of choice for long-term substantive investment,” Noonan said. “Apple has been in Ireland since the 1980s and employs thousands of people in Cork.”
A statement from the U.S. government was expected later Tuesday.
In a white paper made public last week, the U.S. Treasury Department accused the European Union of using a different set of criteria to judge cases involving American companies, calling the potential penalties “deeply troubling.”
The Associated Press contributed to this article.
Happy to hear the good news, and hope it is trending. Other US corporations evade paying US tax, (partially because of the blatently unfair ‘Tax The Rich’ policies of the United States) even though many are subsidized by the American taxpayer.
This is nothing but a money grab by a world government with financial problems. This ruling should send shock waves to every country operating in Europe. It is scary to think a government can go back 13 years and change the tax rate. This would probably be a good time for multinational corporations to pull their world headquarters out of Europe. As the EU tries to cover the debts of their irresponsible member nations, they are going to go after anyone that has money.
The United States’ deep debt should be a cause for concern. There is a real chance that our government will try the same trick when the day of reckoning finally comes for the decades of irresponsible deficit spending.
DON’T come HERE looking for Sympathy Apple, if you SLEEP with Prostitutes you are, SOONER or LATER, GOING to get AIDS!
Socialists and communists just can’t stand that someone has worked hard to build up a business and have lots of money and they want to get their hands on it to spend fruitlessly. Apple definitely must continue to fight these pigs. Apple earned it and they deserve it but the EU is a owned by globalists who do not want any one or company to be better than they at making money. Sorry, Apple earned it and no need to satisfy your idiotic claim! By the way, Apple’s business sells 2/3 of everything outside the USA and so don’t complain about why because it is simple, the USA has the highest business taxes of any other country. So if you sell more outside the US, then, of course, you don’t pay more taxes and the EU knows that too but can’t stand honest free marketing!
Apple please fight this injustice. If you fail to prevail, then just move your operations to the UK or someplace else. I applaud the Irish Government if they proceed with fighting the EU ruling. Going back to re-write a tax agreement is not fair. The EU is out of control with too much control and power. Europe is doomed. I am glad the British got out of that EU mess.