European Commission rules that Apple should repay Ireland 13bn euros
Ireland should recover up to €13bn from Apple in back taxes, the European Commission has ruled.
The commission said Ireland enabled Apple to pay substantially less than other businesses, paying a corporate tax of no more than 1%.
Ireland and Apple have both said they disagreed with the record penalty and would appeal against it.
Commissioner Margrethe Vestager said: “Member states cannot give tax benefits to selected companies – 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,” she added.
The standard rate of Irish corporate tax is 12.5%. The Commissions’s investigation concluded that Apple had effectively paid 1% tax on its European profits in 2003.
Apple is going to appeal against the ruling and said: “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.”
Ireland also disagrees with the record penalty and would appeal against it: “I disagree profoundly with the Commission…The decision leaves me with no choice but to seek cabinet approval to appeal. 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,” said Ireland’s finance minister, Michael Noonan, in a statement.
The tax bill should not be a problem for Apple, which made a net profit of $53bn in the 2015 financial year.