Thursday

17th Aug 2017

Apple faces massive Irish tax bill

  • The US treasury threatened retaliation if the EU forces Apple to pay back taxes. (Photo: Jon Rawlinson)

The European Commission is expected on Tuesday (30 August) to order US tech giant Apple to pay back billions of euros to Ireland, two years after tax decisions taken in Dublin were deemed illegal state aid.

The commission will present a formula with which the Irish government will calculate the amount of taxes to be paid by Apple. Some analysts say the bill could reach €19 billion.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

In 2014, the commission said the tax arrangements between Ireland and the firm constituted illegal state subsidy.

"There is no indication that the contested measure can be considered compatible with the internal market," the EU executive said in a letter to the Irish government.

The case against Apple was opened in June 2014 over two tax rulings handed by Irish authorities in 1991 and 2007 that allowed the US firm to pay 2 percent tax on the profits made by two of its subsidiaries, instead of the official 12.5 percent corporate tax.

The scheme, the commission said, was "reverse engineered" so that Apple would pay less.

Last year the commission already ordered carmaker Fiat and coffee chain Starbucks to repay between €20 and €30 billion to Luxembourg and Netherlands in the same ground.

The forthcoming ruling, to be announced by EU competition commissioner Margrethe Vestager, will embarrass the Irish government. It has said it will fight the decision, which will amount to a refusal to accept a large sum of money.

The commission is "making up new rules for international tax”, an unnamed Irish minister was quoted as saying by the Irish Times.

“They are trying to make us tax Apple for stuff that doesn’t happen here. It’s nonsense.”

The ruling is also likely to irritate the US administration, which last week strongly criticised the commission's policies on state aids and tax rulings.

The US treasury said in a report: “The commission is charting a course that sets aside years of multilateral efforts.”

The department said it would "consider potential responses should the commission continue its present course".

EU cautious with German diesel plan

The European Commission welcomed the German carmakers' pledge to update software in diesel cars, but is waiting for details on how emissions will be reduced.

News in Brief

  1. Mixed Irish reactions to post-Brexit border proposal
  2. European Union returns to 2 percent growth
  3. Russian power most feared in Europe
  4. Ireland continues to refuse €13 billion in back taxes from Apple
  5. UK unemployment lowest since 1975
  6. Europe facing 'explosive cocktail' in its backyard, report warns
  7. Danish police to investigate misuse of EU fishing rules
  8. German constitutional court questions ECB's €2tn spending

Stakeholders' Highlights

  1. European Healthy Lifestyle AllianceDoes Genetics Explain Why So Few of Us Have an Ideal Cardiovascular Health?
  2. EU2017EEFuture-Themed Digital Painting Competition Welcomes Artists - Deadline 31 Aug
  3. ACCABusinesses Must Grip Ethics and Trust in the Digital Age
  4. European Jewish CongressEJC Welcomes European Court of Justice's Decision to Keep Hamas on Terror List
  5. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  6. Centre Maurits CoppietersWe Need Democratic and Transparent Free Trade Agreements Says MEP Jordi Solé
  7. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  8. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  9. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  10. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  11. ACCAAnnounces Belt & Road Research at Shanghai Conference
  12. ECPAFood Waste in the Field Can Double Without Crop Protection. #WithOrWithout #Pesticides