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EU hits Apple with $14.6 billion tax bill

2016-08-30 16:09 by
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The European Commission on Tuesday ordered that Apple should repay taxes of up to $14.5 billion to the Irish government. According to the EU commissioners, Ireland granted undue tax benefits to the U.S. tech giant, which is illegal under EU state aid rules.

Back in 1991, Apple struck a tax deal with Ireland that was completely aboveboard and legal. The Irish government provided Apple with a "comfort letter" that said the company would pay very low rates of tax if it based its European operations in Ireland.

What the EU considers "illegal" is the fact that Ireland 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.

"If my effective tax rate was 0.05 percent, then falling to 0.005 percent, I would have the feeling that maybe I should have a second look at my tax bill," EU Commissioner Margrethe Vestager said. "We're sending a message to any taxpayer in Europe: This is a wonderful place to do business and invest, but you have to play by the rules," she told CNBC.

Apple has reacted with outrage, saying that it will appeal and overturn the decision.

Read more -here-

 

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