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European Union orders Apple to pay $14.5 billion in back taxes


"And I think it is important for us to do what we are obliged to do, to make sure that we have fair competition in Europe and that no individual company can have selective benefits".

The ruling, which ABC News described at length today, is the result of a three year investigation by the commission, which is the executive branch of the European Union, that concluded Ireland gave Apple unfair tax advantages. It says it paid $13 billion in corporate income taxes globally.

"In Ireland and in every country where we operate, Apple follows the law and we pay all the taxes we owe".

What's more, the USA government agency warned that the ruling "could threaten to undermine foreign investment, the business climate in Europe and the important spirit of economic partnership between the US and the European Union".

Last week the European Commission denied it was targeting U.S. companies in particular and said that EU rules do not allow national tax authorities to give tax breaks to some companies that are not available to others.

In a setback to USA tech giant Apple just before the much-awaited launch of its iPhone 7, the European Commission on Tuesday announced that Ireland must demand 13 billion euros in taxes from the Cupertino, San Francisco-based company.

Apple has had a base at the southern city of Cork since 1980 and employs 5,000 people in Ireland, through which it routes its worldwide sales, avoiding billions in corporation taxes.

Ms Vestager dismissed threatened court challenges from Apple and the Irish Government, saying she had a "very concrete case". Apple has 5,500 workers in Ireland, making it one of the biggest private-sector employers.

"It is also possible that the kinds of payments that were contemplated by the European Union's decision today.are merely a transfer of revenue from USA taxpayers to the EU", Earnest said at the briefing for reporters.

Currently, the setup allows Apple to record all its sales across the EU's 28 nations and 500 million consumers in Ireland.

These profits allocated to the "head offices" were not subject to tax in any country under specific provisions of the Irish tax law, which are no longer in force.




13 billion euros ($14.5 billion) looks like a ton of money for any nation.

Should Apple eventually pay the Irish that sum, it would represent about 2,825 euros ($3,150) per man, woman and child. "It is about which government collects the money".

For many technology firms like Google and Facebook, a key attraction is that Ireland allows companies to adopt tax structures which see them pay much less than the 12.5 per cent headline rate. A year ago the country spent around 48.5 billion euros some 13 billion euros of that on health care, the same sum as Tuesday's tax order and recorded a deficit below 5 billion euros.

Facebook's tax practices are already under investigation in the U.S. Last month, the Internal Revenue Service sued Facebook for documents related to how it transferred some assets to Ireland in 2010. The company will appeal the decision.

"The European Commission has launched an effort to rewrite Apple's history in Europe, ignore Ireland's tax laws and upend the worldwide tax system in the process", he wrote.

While Apple could easily afford the bill, the tech giant said it will challenge the EU decision, which found that Ireland granted a sweetheart deal that let Apple pay nearly no taxes across the European bloc for 11 years.

Mr Cook said he was committed to the presence but warned that the "most profound and harmful effect" of the watchdog's ruling will be on jobs and investment in Europe. As our business has grown over the years, we have become the largest taxpayer in Ireland, the largest taxpayer in the United States, and the largest taxpayer in the world.

"Ireland must now recover the illegal aid", an European Union statement read. He says: "Full tax due was paid in accordance with the law".

"This is a standard feature of European Union state aid rules", the commission said in a statement. The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes.

Republicans and Democrats in the Senate have discussed plans to encourage the repatriation of US profits overseas. "The decision leaves me with no choice but to seek cabinet approval to appeal the decision before the European Courts".

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