The Cupertino based tech-giant, Apple has been asked to pay €13 Billion in taxes to the Irish authorities after the European Commission (EU’s anti-trust regulators) ruled that it had received illegal state aid.
The massive sum, some 40 times bigger than the previous known one demanded by the European Commission from a company in such a case, could be reduced, the EU executive said in a statement, if other countries sought more tax themselves from Apple.
Apple which has already paid a tax rate on European profits of between 0.005 and 1 percent, has also said it will appeal the decision, the Commission said.
In response to the charges issued, Apple has officially confirmed that they will appeal.
Apple follows the law and pays all of the taxes we owe wherever we operate. We will appeal and we are confident the decision will be overturned.Apple Statement
The company further highlighted the impact of their supposed break of tax laws which could hit employment opportunities in Europe.
The Commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money. It will have a profound and harmful effect on investment and job creation in Europe
The Cupertino-based company also emphasised on the possible impact that this case could have with respect to creating jobs in Europe.
The Commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money. It will have a profound and harmful effect on investment and job creation in Europe
Ireland “Disagrees Profoundly” With EU on Apple Tax Bill
However, Ireland has said that it disagrees profoundly with the European Commission’s ruling against its tax dealings with Apple, Finance Minister Michael Noonan said on Tuesday ahead of seeking cabinet approval to appeal.
Ireland’s finance ministry said its position remained that the full amount of tax was paid and no state aid was provided. Ireland did not give favourable tax treatment to Apple and does not do deals with taxpayers, it added.
For Apple, whose earnings of $18 billion last year were the biggest ever reported by a corporation, finding several billion dollars should not be an insurmountable problem. The 13 billion euros represents about 6 percent of the firm’s cash pile.
What Tim Cook has to Say
Apple’s CEO Tim Cook has written a letter that is publicly available on Apple’s website. He has mostly highlighted Apple’s effort in the region over the years, and talked up Steve Jobs setting up its first operation centre for Europe way back in 1980s.
The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process. The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals. We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don’t owe them any more than we’ve already paid.Tim Cook’s letter
Cook pointed out that Apple’s major set of operations take place out of the US, which is why they’re technically not liable to pay taxes in Europe.
In Apple’s case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. 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.Tim Cook
(With inputs from Reuters)
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)