The European Commission (EC) has decided that technology giant Apple should repay 13bn euros (£11bn) in back taxes to Ireland, following a three-year investigation.
Tax arrangements between Apple and Ireland were ruled to be illegal by the EC, with the ‘selective treatment’ of Apple by the country resulting in the world’s most valuable country paying a corporate tax rate below 1 per cent, effectively. The standard corporate tax rate in Ireland is 12.5 per cent.
The EC determined that in 2003, Apple essentially paid just 1 per cent tax on its profits in Europe, while in 2014 it paid approximately 0.005 per cent tax.
Following the review being released, Commissioner Margrethe Vestager said: “This decision sends a clear message. Member states cannot give unfair tax benefits to selected companies, no matter if they are European or foreign, large or small, part of a group or not. This is not a penalty; this is unpaid taxes to be paid.
“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.”
Apple and Ireland strongly deny the EC report’s claims, and will appeal the ruling. Apple issued a statement in response to it, saying: “The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process,” the company said in a statement.
“The Commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money. 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.”