EU declares Apple benefited by up to €13bn illegally in Ireland

30 Aug 2016144 Shares

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The EU tax bill for Apple is far more than Ireland could ever have imagined

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The European Commission has declared that Ireland granted illegal tax benefits of up to €13bn to Apple and has ordered the country to recover these taxes.

Europe’s Competition Commissioner Margrethe Vestager has issued an outcome on the Apple tax issue that is far worse than Ireland had imagined.

The country had hoped she would declare a finding in the hundreds of millions or at least in the low billions.

‘This selective treatment allowed Apple to pay an effective corporate tax rate of 1pc on its European profits in 2003 down to 0.005pc in 2014’
– MARGRETHE VESTAGER

Both Apple and the Irish Government had vehemently denied there had been any special agreement regarding Apple’s tax affairs in Ireland.

Vestager’s €13bn finding suggests that Apple benefited from a 1pc corporate tax rate over a number of years.

Her finding comes after a three-year-long investigation into Apple’s business practices.

Vestager on the Apple tax bill

“Member states cannot give tax benefits to selected companies – this is illegal under EU state aid rules,” Vestager said.

“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 1pc on its European profits in 2003 down to 0.005pc in 2014.”

Appeals likely

The finding is 40 times larger than previous and similar decisions made by the European Commission in relation to multinational tax affairs.

Vestager said that the tax bill could be reduced if other countries in Europe sought more tax from the California tech giant.

Apple has said that it will appeal the European Commission’s decision.

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com