Apple ordered to pay upwards of $14bn to Ireland in back taxes

After a three-year investigation into Ireland's tax arrangements with Apple, the European Commission has concluded that Apple has been avoiding tax on almost all of its profits from sales between 1991 and 2015.

Europe's antitrust regulator ordered Ireland on Tuesday to demand up to $14.52bn (€13bn) from Apple in back taxes, on account that the country has granted the US company huge illegal tax breaks. EU state aid legislation forbids member states from giving tax benefits to selected companies.

Ireland's finance minister, Michael Noonan, expressed strong discontent with the EC's decision:



Europe's antitrust enforcer has concluded that between 1991 and 2015, Apple has been paying substantially less corporate tax than other such businesses. In 2003, the company paid an effective corporate tax rate of 1 percent on profits of Apple Sales International, with the amount decreasing to merely 0.005 percent in 2014. For comparison — Ireland's corporate tax rate for trading income, sans tax reductions or benefits, is 12.5%.

In an official statement on the matter, EU competition commissioner Margerethe Vestager said that the evidence collected by EC investigators would be strong enough to withstand a possible appeal by Ireland at the CJEU.

The EU's official stance is that Ireland's tax rulings have endorsed an artificial internal allocation of profits within Apple Sales International and Apple Operations Europe, which has “no factual or economic justification.” Said tax rulings have resulted in most sales profits of Apple Sales International being allocated to a fictitious “head office” that neither had a base, nor any employees, when only the Irish branch of Apple Sales International actually had “the capacity to generate any income from trading.”

Tim Cook, CEO of Apple Inc., has since published an open letter regarding the Commission's decision on the company's website. In it, Cook calls the ruling “unprecedented” and argues that the investigation of the EU antitrust regulator was motivated not by how much taxes Apple pays, but rather by “which government collects the money.”

The letter goes on to make a case that, since almost all of Apple's R&D takes place in California, it is then to be expected that the vast majority of its profits will be taxed within the United States, and not Europe.

“European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules [...] Using the Commission’s theory, every company in Ireland and across Europe is suddenly at risk of being subjected to taxes under laws that never existed,” writes Cook.

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161 Comments

1. FrequencyBender

Posts: 18; Member since: Feb 26, 2015

Awesome!

27. Martineverest

Posts: 521; Member since: Oct 27, 2015

Yeah .... Google and Apple must equal Volkswagen fine

91. HugoBarraCyanogenmod

Posts: 1412; Member since: Jul 06, 2014

not so fast, Ireland itself defend apple against established EU Time for Ireland to exit corrupt EU http://www.cnbc.com/2016/08/30/ireland-to-appeal-against-apple-ruling-defends-tax-system.html

138. trojan_horse

Posts: 5868; Member since: May 06, 2016

You mean corrupt Ireland should exit the EU!

3. Papa_Ji

Posts: 873; Member since: Jun 27, 2016

MOST HATED COMPANY ON THE EARTH.....

6. kiko007

Posts: 7520; Member since: Feb 17, 2016

Is that why they're so valuable?

17. Hoggington

Posts: 356; Member since: Feb 23, 2016

Because they sell overpriced gadgets, and people are brainwashed.

61. Lyngdoh

Posts: 319; Member since: Sep 06, 2012

Is this how they became valuable?

90. rick_mobile

Posts: 359; Member since: Dec 13, 2010

So by stealing, lying and cheating while exploiting the weak human psychology with bs marketing makes a company valuable? Proofs that you don't need to study to be stupid

97. Firenze91

Posts: 206; Member since: Nov 19, 2014

Really Kiko??? the " most valuable company" argument again??? I'm starting to doubt your logic and your common sense....i know you're an Apple fan but try to be objective in your argument

103. kiko007

Posts: 7520; Member since: Feb 17, 2016

Check market cap champ. That isn't bias, they are LITERALLY the most valuable company on the planet. Jesus, how hard is it yo use Google to find stuff out?

106. marorun

Posts: 5029; Member since: Mar 30, 2015

He was not challenging you on thats fact you used thats informations as an excuse in wich its has no value. Stop acting dumb plz.

122. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

He isn't acting! No matter how high their IQ is, they are still stupid! Especially when they claim the largest users of iPhone have the highest IQ, as if IQ has anything to do with being smart. Just like Apple's market cap has nothing with consumers in general.

140. trojan_horse

Posts: 5868; Member since: May 06, 2016

Right! kiko brags about Apple users having greater IQ, as if it means f--k, when it comes to consumer Tech.

141. trojan_horse

Posts: 5868; Member since: May 06, 2016

Them Apple fans got fooled with a fake iPhone running Android, and they believed it to be a real iPhone running iOS 9! Higher IQ my a**

167. Firenze91

Posts: 206; Member since: Nov 19, 2014

so true....I'm currently studying mechanical engineering and most of the engineers (especially those with actual IQ) use android phones, those that use iphones have a spare android smartphone....i myself have an iphone 6s and a galaxy s6 edge but really just use my iphone for music and chat....

143. lyndon420

Posts: 6867; Member since: Jul 11, 2012

The only reason they got the top spot again was by default. Alphabet is still unknown to most of the world, so Google's position fell due to it. Google it ;)

156. guests

Posts: 196; Member since: Jun 19, 2016

The moment kiko see an apple logo, right away he lose his common sense, logic and rationalization.

118. lyndon420

Posts: 6867; Member since: Jul 11, 2012

There's a big difference between being a valuable company and a rich one. Apple is rich, but not valuable when thinking long term stability.

133. ctdog4748

Posts: 797; Member since: Mar 05, 2016

Wow, you should submit your resume to Apple ASAP so they can replace Tim Cook with you, and you can use your incredible business savvy to make Apple valuable and give the company long term stability. I'm sure the position will pay substantially less than your current one, but gone on, show em' how it's done!

144. lyndon420

Posts: 6867; Member since: Jul 11, 2012

Touched a nerve i'm guessing? Lol. Green thumb for you sir ;)

155. ctdog4748

Posts: 797; Member since: Mar 05, 2016

You're cute when angry ;)

159. lyndon420

Posts: 6867; Member since: Jul 11, 2012

You're angry and trying to be cute ;)

146. razmahtaz001

Posts: 501; Member since: May 11, 2013

anyone knows that samsung is more valueable LOL

160. lyndon420

Posts: 6867; Member since: Jul 11, 2012

Can any company be more valuable than the oil companies or big pharma? As sad as it is, oil pretty much still controls everything.

145. razmahtaz001

Posts: 501; Member since: May 11, 2013

apple is only valueable due to: - not paying their taxes LOL - if you want to sell idevices, you must order this many idevices - i take you to court for copying me, but at the same time i will copy you - i pay you less, but i charge you more to implement my patent - ebook fiasco - i pay you to shut up - yada, yada, yada LOL

153. bobby84

Posts: 595; Member since: May 13, 2016

because Appl can rise the price $100 remove features and iSheeps will still buy.

20. Scott93274

Posts: 6040; Member since: Aug 06, 2013

.... Actually, that would be Shell, for four years running.

4. kiko007

Posts: 7520; Member since: Feb 17, 2016

Let me tell the niave this now.......Apple isn't going to pay a dime to the EU court anytime soon. Reasons being: A) Ireland has already filed an appeal effective immediately. B) The period at which Apple would pay off the fine is probably staggeringly insignificant. C) Apple may just raise the price of EU Apple products because they can. D) Tim Cook ain't payin' out of pocket, people gettin' laid off to cover this. Good job EU, you just cost thousands of Europeans their job. Well done!/s

11. RebelwithoutaClue unregistered

BS, this isn't going to cost thousands of Europeans their jobs. For the Dutch sandwich, double Irish construction they use mostly a small branch just to have a PO box in that country. But it's not like there are thousands at work.

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