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Apple owes billions in taxes

Apple will have to pay up to 13 billion euros ($14.5 billion) plus interest in back taxes to Ireland after the European Union found Tuesday that the U.S. technology giant received illegal tax benefits over 11 years.

The ruling is the biggest salvo in the EU executive Commission's battle to have multinationals pay their fair share in the region. The EU alleges that many big companies struck deals with EU countries to pay unusually low tax in exchange for basing their EU operations there.

EU Competition Commissioner Margrethe Vestager said that a three-year investigation found Ireland granted such lavish tax breaks to Apple that the multinational's effective corporate tax rate on its European profits dropped from 1 per cent in 2003 to a mere 0.005 per cent in 2014.

That last tax rate meant that for each million euros in profits, Apple paid just 50 euros in taxes, Vestager told a news conference.

"Member states cannot give tax benefits to selected companies_this is illegal under EU state aid rules," Vestager said.

"Ireland must now recover the unpaid taxes in Ireland from Apple for the years 2003 to 2014 of up to 13 billion euros ($14.5 billion), plus interest," the Commission said in a statement.

Apple said in a statement that it had followed the law and paid every cent of the taxes it owed. It said it would challenge the EU action in the European courts, and predicted it would be vindicated.

The Irish government denied granting favourable fiscal treatment to the maker of the iPhone and other consumer electronics products, computer software and online services. "Ireland's position remains that the full amount of tax was paid in this case and no state aid was provided," the Irish statement said. "Ireland does not do deals with taxpayers."

Apple accused the EU executive body of engaging in efforts "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," the company said in a statement. "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."



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