On August 30, the European Commission concluded that Ireland gave Apple illegal tax benefits of €13 billion between the years 2003 to 2014. The Irish government has been ordered to recover the funds plus interest. Both, the Irish Government and Apple said they will appeal against the decision.
The European Commission announced that the investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled the company to pay substantially less tax than other businesses over many years. The Commission informed that the deal between Apple and Ireland allowed the company to pay a tax rate of only 1% on its European profits in 2003, with that figure decreasing to as little as 0.005% by 2014.
The commission said that Apple received selective tax treatment that allowed a way to establish taxable profits for two Irish incorporated companies of the Apple group (Apple Sales International and Apple Operations Europe), which did not correspond to economic reality. Almost all sales profits recorded by the two companies were internally attributed to a "head office", which existed only on paper and could not have generated such profits. These profits were not subject to tax in any country under specific provisions of the Irish tax law, which are no longer in force, the Commission informed.
Irish finance minister Michael Noonan said he disagreed “profoundly” with the decision, saying that the Irish tax system "is founded on the strict application of the law, as enacted by the Oireachtas, without exception. The decision leaves me with no choice but to seek Cabinet approval to appeal the decision before the European courts."
In response to the decision, Apple stated that it will appeal and that it is confident the decision will be overturned. "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.
"The Commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money. It will have a profound and harmful effect on investment and job creation in Europe," Apple said in a statement.
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