TECH

Apple To Pay 13 Billion Euros In Back Taxes, Orders European Commission

That being said, Apple and the Irish government are likely to appeal the decision.

30/08/2016 11:18 | Updated 31 August 2016
Thomas Peter / Reuters

The European Commission has ordered Apple to pay Ireland €13 billion (£11 billion) in back taxes.

Apple’s enormous tax bill is the result of a three-year long investigation which looked into the way Ireland was offering tax benefits to the tech giant.

Clarifying that this decision was neither a fine, nor a penalty Commissioner Margrethe Vestager described it as simply “unpaid taxes” saying: “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. In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014.”

An in-depth investigation was launched in 2014 and found that since 1991, Ireland was artificially lowering the amount of tax paid by Apple to the country.

Both Apple and Ireland have release statements saying they plan to appeal the decision.

Ireland’s finance minister Michael Noonan said: “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.”

Apple has also released a statement:

“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 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.”

This breaking news story is being updated.

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