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Apple should pay €13bn to Ireland in back taxes

Apple should pay €13bn to Ireland in back taxesApple is ordered to pay up to 13 billion euros ($14.5 billion) in taxes plus interest to the Irish, EU antitrust regulators said on Tuesday.

After a three-year investigation the European Commission ruling provides that a special scheme to route profits through Ireland was illegal state aid. The Commission said Ireland granted the company to pay substantially less than other businesses.

"Member states cannot give tax benefits to selected companies - this is illegal under EU state aid rules," said Commissioner Margrethe Vestager.

"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," she added.

The Commission investigated that Apple had paid 1% tax on its European profits in 2003 and about 0.005% in 2014 while the standard rate of Irish corporate tax is 12.5%.

Apple has promptly reacted to the decision, saying it would appeal. The company said that such EU conclusion would be harmful for jobs.

"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 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."

The Irish government shares the same view and also wants to appeal.

"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," Ireland's finance minister, Michael Noonan, said in a statement.

The record for EU tax bill should not be a problem for Apple, which made a net profit of $53bn in the 2015 financial year.
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