Wednesday

6th Dec 2023

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

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe 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.

Opinion

Can Green Deal survive the 2024 European election?

Six months ahead of the EU elections, knocking an 'elitist' climate agenda is looking like a vote-winner to some. Saving the Green Deal and the EU's climate ambitions starts with listening to Europeans who are struggling to make ends meet.

Analysis

What are the big money debates at COP28 UN climate summit?

The most critical UN climate conference (COP28) ever will run from Thursday to mid-December — with talks on climate commitments and climate finance expected to determine the success of this year's summit.

Latest News

  1. Crunch talks seek breakthrough on EU asylum overhaul
  2. Polish truck protest at Ukraine border disrupts war supplies
  3. 'Green' banks lend most to polluters, reveals ECB
  4. Tense EU-China summit showdown unlikely to bear fruit
  5. A look to the past and the future of China-EU relations
  6. Tusk's difficult in-tray on Poland's judicial independence
  7. EU nears deal to fingerprint six year-old asylum seekers
  8. Orbán's Ukraine-veto threat escalates ahead of EU summit

Stakeholders' Highlights

  1. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  2. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  3. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  4. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?
  5. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  6. UNOPSFostering health system resilience in fragile and conflict-affected countries

Join EUobserver

Support quality EU news

Join us