EU Commission rules Apple owes Ireland €13billion in back taxes

EU Commission rules Apple owes Ireland €13billion in back taxes

THE European Commission has ordered that Ireland demands back taxes from Apple of approximately €13billion.

Competition Commissioner Margrethe Vestager today announced the findings of the three-year State Aid investigation into the tech giant's tax arrangements in Ireland.

The EU probe has found that Apple had been conferred with an unfair advantage as a result of tax rulings it received from the Revenue in 1991 and 2007.

The Irish government and Apple have always rejected allegations of wrongdoing and both separately intend to appeal the decision.

In a statement this morning the European Commission said it has "concluded that Ireland granted undue tax benefits of up to €13billion to Apple".

"This is illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses.

"Ireland must now recover the illegal aid," a Commission statement said.

Commissioner Margrethe Vestager, in charge of 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."

The Finance Department has insisted that Apple did not get any special treatment from the Revenue Commissioners and that Ireland has "a robust case" in appealing the Commission's ruling.

The purpose of tomorrow's Cabinet meeting is to get face-to-face agreement on the appeal, a course of action Minister Noonan and the Department of Finance have repeatedly backed.

Opposition politicians have called for the back taxes to be recovered and spent on public services and housing.

However, the government has argued that Ireland would suffer reputational damage if the State doesn't appeal the decision and that even if the cash is ultimately paid by Apple, it would have to be used to pay down the national debt.

A government spokesman pointed out that Apple will soon employ 6,000 people in Cork.

"When we talk about defending reputations we're talking about defending jobs," he said.