Apple has been ordered to pay Ireland up to €13 billion ($14.52 billion) in back taxes following an investigation by the European Commission. The company was found to have received illegal state aid and was taxed as little as 0.005 percent.
“Apple faces the record bill after the European Commission (EC) ruled that a special scheme to route profits through Ireland was illegal state aid,” reports Sky News. The €13 billion sum is 40 times bigger than any previous demand by the EC.
“Member states cannot give tax benefits to selected companies – this is illegal under EU state aid rules,” explains commissioner Margrethe Vestager.
“The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years.”
In 2014, Apple was taxes as little as 0.005 percent on its profits. That means the company coughed up just €50 ($56) in taxes on every €1 million ($1.12 million) it made in profit.
Ireland’s finance ministry said it “disagrees profoundly” with the decision, and that it will prepare an appeal. Apple will almost certainly be preparing its own appeal, too.
Irish tax rulings to Apple are illegal state aid. Effective taxation as low as 0,005 pct. #Apple has to repay up to €13 billion unpaid tax.
— Margrethe Vestager (@vestager) August 30, 2016
This decision comes after a three-year investigation into the way in which Apple has conducted its business in Europe, specifically when it comes to paying corporation tax to the Irish government, where its European headquarters are located.
Update: Apple has now confirmed that it will appeal the EC’s ruling.
UPDATE: Apple says will appeal against European Commission tax decision. #AppleTax
— Reuters Tech News (@ReutersTech) August 30, 2016
[via Sky News]