EU Orders Apple To Pay Ireland 13 billion Euros in Tax
Apple was ordered to repay a record 13 billion euros ($14.5 billion) plus interest after the European Commission said Ireland illegally slashed the iPhone maker’s tax bill. Apple benefited from a "selective tax treatment" in Ireland that gave it a "significant advantage over other businesses," the European Union regulator said Tuesday in its largest tax penalty in a three-year crackdown on sweetheart fiscal deals granted by EU nations.
The massive sum could be reduced, the EU executive said in a statement, if other countries sought more tax themselves from the U.S. tech giant.
Apple, which with Ireland said it will appeal the decision, paid tax rates on European profits on sales of its iPhone and other devices and services of between just 0.005 percent in 2014 and 1 percent in 2003, the Commission said.
"Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years," said Competition Commission Margrethe Vestager, whose crackdown on mainly U.S. multinationals has angered Washington which accuses Brussels of protectionism.
The 13 billion euros represents about 6 percent of Apple's cash pile.
Amazon.com and McDonald's Corp also face probes over taxes in Luxembourg, while coffee chain Starbucks has been ordered to pay up to 30 million euros ($33 million) to the Dutch state.
The European Commission in 2014 accused Ireland of dodging international tax rules by letting Apple shelter profits worth tens of billions of dollars from tax collectors in return for maintaining jobs. Apple and Ireland rejected the accusation.
"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 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 said.
In preliminary findings in 2014, European competition authorities said Apple’s tax arrangements were improperly designed to give the company a financial boost in return for creating jobs in Ireland.