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30th Aug 2016

Apple ordered to pay back £11 BILLION in taxes to Ireland

It's the biggest in EU history...

Declan Cashin

EU competition officials have ordered Apple to pay back £11 billion in back taxes to the Irish state.

The European Commission has been investigating if the company breached any European laws in the conduct of its complicated tax affairs in Ireland.

In a statement this morning, Commissioner Margrethe Vestager, who is in charge of European competition policy, said:

“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.”


She added:

“This selective tax treatment of Apple in Ireland is illegal under EU state aid rules, because it gives Apple a significant advantage over other businesses that are subject to the same national taxation rules. The Commission can order recovery of illegal state aid for a ten-year period preceding the Commission’s first request for information in 2013. Ireland must now recover the unpaid taxes in Ireland from Apple for the years 2003 to 2014 of up to €13 billion, plus interest.”

As the BBC explains, under EU law, “national tax authorities are not allowed to give tax benefits to selected companies – which the EU would consider to be illegal state aid.”

The EU has argued that decisions made by the Irish government in 1991 and 2007 helped Apple to minimise its Irish tax bill.

Apple is expected to appeal against the ruling, as is the Irish government, which has long insisted that Apple doesn’t get any special tax favours.

The Independent reports that any appeal could delay the matter for another five or six years. The paper also argues that any massive tax liability would not jeopardise the jobs of the 6,000-plus workers in Apple’s Cork facility.

The international ruling looks set to overshadow Apple’s unveiling of its new iPhone at the start of September, which is seen as a crucial period for the company to regain some of the cultural cache it has lost over the last few years.

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