Apple-Ireland Slapped with 13b Euro back-Tax Bill

تم نشره في Tue 30 August / Aug 2016. 12:00 AM - آخر تعديل في Tue 30 August / Aug 2016. 04:04 PM
  • European Commissioner gestures during a news conference on Ireland's tax dealings with Apple Inc in Brussels, Belgium August 30, 2016. – (REUTERS)

BRUSSELS — Ireland should recover up to 13 billion Euros from Apple in back taxes, the European Commission has ruled, after a 3-year investigation, concluding the US firm's tax benefits are illegal.

EU antitrust regulators ordered Apple on Tuesday to pay up to USD14.5 billion in taxes plus interest to the Irish government after ruling that a special scheme to route profits through Ireland was illegal state aid.

The massive sum, 40 times bigger than the previous known demand by the European Commission to a company in such a case, could be reduced, the EU executive said in a statement, if other countries sought more tax themselves from the US tech giant.

Apple, which said it will appeal the decision along with Irish officials, paid tax rates on European profits on sales of its iPhone and other devices and services of between just 0.005 per cent in 2014 and 1 per cent in 2003, the Commission said.

"Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years," said Competition Commission Margrethe Vestager, whose crackdown on mainly US multinationals has angered Washington which accuses Brussels of protectionism.

Online retailer and hamburger group McDonald's Corp face probes over taxes in Luxembourg, while coffee chain Starbucks Corp has been ordered to pay up to 30 million euros (USD33 million) to the Dutch state.

A bill of 300 million euros this year for Swedish engineer Atlas Copco AB to pay Belgian tax is the current known record. Other companies ordered to pay back taxes in Belgium, many of them European, have not disclosed figures.

For Apple, whose earnings of USD18 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 per cent of the firm's cash pile.

As of June, Apple reported it had cash, cash equivalents and marketable securities of USD231.5 billion, of which 92.8 per cent, or USD214.9 billion, were held in foreign subsidiaries. It paid USD2.67 billion in taxes during its latest quarter at an effective tax rate of 25.5 per cent, leaving it with net income of USD7.8 billion according to company filings.

The European Commission in 2014 accused Ireland of dodging international tax rules by letting Apple shelter profits worth tens of billions of dollars from tax collectors in return for maintaining jobs. Apple and Ireland rejected the accusation.

"I disagree profoundly with the Commission," Irish Finance Minister Michael Noonan said in a statement. "The decision leaves me with no choice but to seek cabinet approval to appeal.

"This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state aid rules into the sovereign member state competence of taxation."

Ireland also said the disputed tax system used in the Apple case no longer applied and that the decision had no effect on Ireland's 12.5 per cent corporate tax rate or on any other company with operations in the country.

Apple said in a statement it was confident of winning an appeal.