Apple told to pay 13 bn euros to Ireland

Brussels, August 30 

The European Union today ordered Apple to pay a record 13 billion euros in back taxes in Ireland, saying deals allowing the US tech giant to pay almost no tax were illegal.

In a ruling that is set to anger Washington, the European Commission said the world’s most valuable company avoided tax bills on almost all its profits in the bloc under the arrangements with the Irish government.

Ireland has been seeking to attract US multinationals by offering extremely favourable tax conditions, known as sweetheart deals.

“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,” EU Competition Commissioner Margrethe Vestager said.

“In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1% on its European profits in 2003 down to 0.005% in 2014,” she said.  Ireland said it would appeal against the decision and Apple is also expected to challenge it.

“I disagree profoundly with the Commission’s decision,” Irish Finance Minister Michael Noonan said. 

“The decision leaves me with no choice but to seek cabinet approval to appeal the decision before the European Courts.” The tax repayment order, by far the largest in the EU’s history, follows a three-year inquiry into whether Dublin’s tax breaks for Silicon Valley titan Apple amount to illegal state aid.

Apple has had a base at the southern city of Cork since 1980 and employs 5,000 people in Ireland, through which it routes its international sales, avoiding billions in corporation taxes.

Apple CEO Tim Cook, in a Washington Post interview published August 13, said he hoped to “get a fair hearing” on the matter. “If we don’t, then we would obviously appeal it,” he added. — AFP

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