Here are some key questions surrounding the decision. “But the Commission is now calling to retroactively change those rules”, Cook’s letter continues.
Advertisement
The EU statement said that Apple had paid taxes ranging from 1% in 2003 to 0.005% by 2014 during its operations in Ireland which date back to 1983.
European companies, including Fiat Chrysler Automobiles NV, have also entered the commission’s firing line over their tax deals with EU governments. “We never asked for, nor did we receive, any special deals”. The commission said it treated all companies equally.
“The role of European Union state aid control is to ensure member states do not give selected companies a better tax treatment than others, via tax rulings or otherwise”, the European Union said.
The European Union (EU) said USA tech giant Apple must repay up to 13 billion euros (US$14.5 billion) to the Irish government after ruling that some tax treatment granted by Ireland to Apple was illegal under EU state aid rules.
What period of time does the ruling cover? Tuesday’s judgment represents estimated taxes and interest from 2003 to 2014.
Whereas Ireland taxes only a multinational company’s profits on sales within Ireland a country of barely 4.6 million and representing a tiny fraction of those companies’ global business the United States often seeks to recoup tax on a USA -headquartered company’s profits worldwide. Apple and Ireland rejected the accusation.
Both Apple and the Irish government have vigorously defended the arrangement and say they will appeal.
These profits were not subject to tax in any country under provisions of Irish law that are no longer in force.
Apple added that the decision would have negative effects on creating job opportunities in Europe, adding that “the commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money”.
USA technology giant Apple has been ordered to pay up to €13bn (£11bn) in back taxes to Ireland after a European probe.
The ruling, which sets the stage for a protracted battle between the United States and European Union, prompted a furious response from Apple and the U.S. government.
Michael Noonan, the Irish Minister for Finance, said he would seek permission from the Irish Cabinet to appeal the Commission decision to the European Courts. Ireland’s tax system is founded on the strict application of the law “without exception”, he said.
Such a measure wouldn’t be fair to U.S. taxpayers, he said. However, the authorities are catching on as evidenced by the European Commission ruling which effectively forces Apple to come up with a €13 billion payment. “We are confident that the Commission’s order will be reversed”, Cook said.
A bill of 300 million euros this year for Swedish engineer Atlas Copco AB to pay Belgian tax is the current known record. Apple stock declined by less than 1 percent Tuesday. “Apple now has to repay the benefits”.
Ireland is also expected to appeal the ruling.
Why might Ireland not want this money?
“And when I say “fair”, I mean fair primarily to taxpayers, but also fair to companies that are trying to do business around the world”.
“But every country’s tax rules are different and Apple will be a much more significant multinational in Ireland than it is in New Zealand”.
Does this affect Dublin’s post-Brexit attractiveness to companies?
Advertisement
The rulings endorsed a way to establish the 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: nearly all sales profits recorded by the two companies were internally attributed to a head office.
