Apple founder Steve Jobs opened the company’s first European factory in Cork, Ireland in 1980.
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These profits allocated to the head offices were not subject to tax in any country under specific provisions of the Irish tax law, which are no longer in force.
“This decision sends a clear message, member States can not give tax benefits to selected companies”.
“Apple’s tax benefits in Ireland are illegal”.
The ruling is the result of an investigation going back to June 2014 [case summary].
The US presidency has expressed “concern” about the European Commission’s decision, on Tuesday, that the US Company Apple is obliged to pay a tax debt of 13 billion euros, arguing that joint efforts are affected by the global tax system optimization.
The case has also irked the US Treasury, which earlier this month published a paper accusing European Union authorities of unfairly targeting US companies in antitrust probes. “This would strike a devastating blow to the sovereignty of European Union member states over their own tax matters, and to the principle of certainty of law in Europe”, he said.
The European Commission (EC) has ruled that the tax benefits worth €13bn ($14.5) given by Ireland to Apple were illegal.
The tax benefits enabled the US -based technology firm to enjoy lesser tax payments compared to other businesses in the country.
The commission has ordered Ireland to recover the unpaid taxes of up to €13 billion, plus interest.
The tech giant accused the EU Commission of threatening future investment and job creation in Europe, where it now employs 22,000 people.
The US government has also weighed into the row, previously accusing the European Commission of deliberately targeting American firms – something Brussels denies.
Immeidately after the ruling was handed down, Apple issued a statement saying it will appeal.
Meanwhile, Apple said in a statement it will appeal the ruling and is “confident the decision will be overturned”.
“The decision leaves me with no choice but to seek Cabinet approval to appeal the decision before the European courts”, Noonan said in a statement. “Apple is now in the unusual position of being asked to pay taxes to a government that says they are not due”, he said. “The European Commission classes those deals as illegal state aid, and it has decided that Ireland’s deal with Apple is exactly that”. He says Ireland didn’t view the subsidiaries as legally Irish.
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Starbucks has to pay back up to 30 million euros it saved thanks to a sweetheart tax deal with the Netherlands. An EU investigation into tax agreements between Amazon and Luxembourg is still awaiting a final decision.
