The European Commission, which administer EU law, said that the Irish government had granted illegal state aid to Apple by helping it to artificially lower its tax bill for more than 20 years. “In fact, 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”.
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In Paris, French Finance Minister Michel Sapin backed Vestager’s view that Apple’s Irish tax arrangements amounted to abnormal state aid. Two subsidiaries of Apple that is based in Ireland called Apple Operations Europe and Apple Sales International paid over most of their profits to a certain head office.
He claimed that the EC is picking on Apple, but that the company will continue to invest in its long-established corporate base in Cork, and will work with the Irish government, which also opposes the ruling, to appeal against the decision.
On Tuesday, after a almost 3-year-long investigation, the European Commission ruled that the tax benefits accorded to the us tech giant in Ireland flouted the bloc’s stringent rules against state aid, and were thus illegal.
Cook also dismissed the EC’s contention that Ireland’s “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.
But in another interview he promised to boost tax payments by repatriating billions of dollars in global profits to the United States next year.
In the USA the decision has sent shockwaves through Congress with lawmakers said it could reduce the U.S. tax bill because companies would be eligible for foreign tax credits. “What Ireland was doing was harming other countries”, he told CNBC.
Mr Cook said he was “very confident” the ruling would be overturned on appeal.
“I think that Apple was targeted here”, he said.
With the European Union ordering Apple to pay more than $14 billion in back taxes, Mark Sebastian, founder at Option Pit, joins BNN for a look at why he sees the situation as “a mess” and why the decision could be an opportunity for investors. “It’s normal to make Apple pay normal taxes”. The usual rate of corporation tax in Ireland is 12.5%.
Apple boss Tim Cook has branded his company’s 13 billion euro (£11 billion) bill for unpaid taxes in Europe as “political crap”, maddening and untrue.
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The Irish cabinet will meet on Friday to decide whether to launch an appeal against the decision, having already failed to reach a consensus on Wednesday.
