Tuesday

18th Sep 2018

Apple ordered to repay a record €13 billion to Ireland

  • Vestager: Decision is "clear message to member states that they cannot give unfair tax benefits" (Photo: ec.europa.eu)

The EU Commission has ordered US tech firm Apple to repay up to €13 billion, plus interest, of unpaid taxes to Ireland.

The EU executive decided that tax rulings from Irish authorities in 1997 and 2011 gave Apple "an undue advantage that is illegal under EU state aid rules".

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

"It's not a penalty, it's unpaid taxes," EU competition commissioner Margrethe Vestager said at a press conference.


She said the commission's decision was a "clear message to member states that they cannot give unfair tax benefits to selected companies".

In its investigation, opened in 2014, the commission looked at how Apple reported its profits between two companies it set up in Ireland - Apple Sales International and Apple Operations Europe.

The US giant "endorsed a split of the profits for tax purposes in Ireland", the commission explained in a statement.

"Under the agreed method, most profits were internally allocated away from Ireland to a 'head office' within Apple Sales International. This 'head office' was not based in any country and did not have any employees or own premises," the commission said.

"Only a fraction of the profits of Apple Sales International were allocated to its Irish branch and subject to tax in Ireland. The remaining vast majority of profits were allocated to the 'head office', where they remained untaxed."

As a result, Apple's tax rate on its profits was only 0.05 percent in 2011 and 0.005 percent in 2014.

EU member states have the right to set their own level of taxation, Vestager said, but Apple was "very very far away" from the normal 12.5 percent Irish corporate tax.

It will be up to Irish authorities to determine the exact amount and methods of repayment.

The commission said other countries might now look at the firm's dealings and decide it should have paid taxes in their jurisdictions.

"That would reduce the amount to be paid back to Ireland," Vestager said.

Immediately after Vestager's announcement, the Irish government said it would appeal to the European Court of Justice.

Apple faces massive Irish tax bill

The EU executive will announce how much the tech giant must pay back to Ireland, two years after it ruled that tax decisions in Dublin amounted to illegal state aid.

Irish government in moral dilemma on Apple tax

Anti-poverty activists in Ireland say the government's decision to appeal an EU commission order for Apple to pay back €13 billion undermines its moral authority.

News in Brief

  1. EU investigating BMW, Daimler and VW 'collusion'
  2. Spain wants special Gibraltar chapter in Brexit deal
  3. Italy cancels Vienna talks over South Tyrol 'dual citizenship'
  4. Britain will not accept Brexit deal with Irish Sea border
  5. Slovakia seeks witness to journalist killing
  6. Finland's Stubb considers running for EU commission job
  7. Romania ponders anti same-sex marriage referendum
  8. EU lawyers back Slovenia in Croatia border dispute

Opinion

Aid, migration and the next EU budget

Th next EU budget is the most pivotal opportunity to advance a vision for Europe rooted in human rights and that builds a Union that works for all its members.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  2. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  3. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  4. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  5. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  6. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  7. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  8. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  9. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  10. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  11. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  12. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want

Latest News

  1. Tensions mount over Kosovo-Serbia deal
  2. New book: Why war is coming
  3. EU parliament will not budge on office expenses
  4. Why Orban's project to reshape EU politics will be unsuccessful
  5. 10 years after Lehman Brothers what has changed for EU consumers?
  6. Sefcovic launches bid to be EU Commission president
  7. Is Russia blackmailing the Council of Europe?
  8. First containership goes north of Russia from Asia to Europe

Join EUobserver

Support quality EU news

Join us