Apple ordered to pay €13bn in tax benefits – EU Commission

That internal company practice, as well as two favorable Irish tax rulings in 1991 and 2007, “enabled Apple to avoid taxation on nearly all profits generated by the sale of Apple products in the entire EU single market”, which now encompasses 28 nations and more than 500 million consumers, according to the European Commission.

The Irish finance minister, Michael Noonan, said he would seek approval from the Irish Cabinet to legally challenge the EU Commission’s ruling.

Reverse EngineeringWhen it opened the Apple investigation in 2014, the Commission told the Irish government that tax rulings it agreed in 1991 and 2007 with the company amounted to state aid and might have broken European Union laws.

Sanders focused his insurgent presidential campaign on income inequality and banking reform, arguing that Wall Street financial institutions should pay more taxes and saying the system was “rigged” in favor of the top one percent. It has said it paid Ireland’s 12.5 percent rate on all the income that it generates in the country. This would occur if some of the so far untaxed profits were deemed to have been associated with activities that should have been recorded in a jurisdiction outside of Ireland.

The commission is also investigating the tax arrangements of US tech companies such as Amazon and Google.

This allowed the tech giant to pay an effective tax rate of just 0.005 per cent in 2014.

“The tax treatment in Ireland enabled Apple to avoid taxation on nearly all profits generated by sales of Apple products in the entire EU Single Market”. “Apple has been in Ireland since the 1980s and employs thousands of people in Cork”.

Similar judgements were made against The Netherlands and Luxembourg a year ago regarding Starbucks and Fiat.

Ireland has been ordered by the European Commission to recover €13 billion ($14.5 billion) from Apple in back taxes. According to the judgement, Apple changed its set-up in Ireland in 2014.

The money could also be recovered and placed in an escrow account, pending scrutiny of the Commission’s ruling by European Union courts, to be paid as and when the outcome of European Union court procedures are known.

The EC points out that this is not a fine or an official censure of Apple, rather an attempt to restore fairness in the market.

“All companies, big or small, should pay taxes where they make their profits”.

Apple has responded to the judgement with this short statement.

The European Commission ordered Starbucks and Fiat Chrysler to repay millions in taxes last October. “It will have a profound and harmful effect on investment and job creation in Europe”, said a company spokesperson.

Apple has been told to pay up to £11 billion plus interest in back taxes to Ireland in a ruling by the European Commission.

Apple could also reduce its tax bill by paying more to its USA parent company to fund R&D, she said.

“If you look at the small print on an Apple iPhone, it says designed in California and manufactured in China and that means any profits that accrued didn’t accrue in Ireland and so I can’t see why the tax liability is in Ireland”, he said.

Apple’s local representatives were unable to offer comment at this time.