Apple ordered to pay back €13bn in unpaid tax

Apple ordered to pay back €13bn in unpaid tax

Apple has been ordered to pay €13bn after EU regulators ruled that the US tech giant had received illegal tax benefits from Ireland.

The European Commission’s investigation found that on two occasions, tax rulings issued by Ireland to Apple enabled the US tech giant gain the upper hand by paying less tax than other businesses.

The tax arrangement saw Apple attribute sales from 1991 to 2015 to a head office that the EC found only existed in paper and could not have generated such profits. As a result Apple managed to avoid paying tax on almost all profits generated across the EU Single Market.

Ireland appeals ruling

Ireland has now been ordered to recover the unpaid tax fine from Apple. However Ireland’s Minister for Finance, Michael Noonan said he will be appeal the EC’s decision.

‘I disagree profoundly with the Commission’s decision,’ he said in a statement. ‘The decision leaves me with no choice but to seek Cabinet approval to appeal the decision before the European Courts. 

This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state aid rules into the sovereign Member State competence of taxation. Apple has been in Ireland since the 1980s and employs thousands of people in Cork.  The company has continued to expand its operations in Ireland in recent times.’

‘Selective treatment’

Delivering the verdict, EU Commissioner Margrethe Vestager branded the findings as ‘selective treatment’ towards Apple, which employs 6,000 people in Ireland.

 ‘Member States cannot give tax benefits to selected companies,’ she said, ‘this is illegal under EU state aid rules. The Commission's investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years. In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014.’

 

 

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