Apple vows to fight £11 billion 'sweetheart tax' bill
Apple has said it will launch an appeal at the European Court of Justice after it was ordered to pay a record 13 billion euros (£11.1 billion) in taxes by the European Commission. Although the money would be paid to the Irish government, Dublin has vowed to back the Apple appeal, fearing the ruling will deter future investment in the country.
EU Competition Commissioner: Ireland granted Apple illegal tax benefitsAfter a three-year investigation, the Brussels commission found that the American iPhone giant had reached a "sweetheart deal" with the Irish government that allowed Apple to avoid taxation on almost all profits generated by sales of its products in the entire European single market by recording all of the sales in Ireland rather than in the countries where they were actually sold."Member states cannot give tax benefits to selected companies - this is illegal under EU state aid rules," said EU Competition Commissioner Margrethe Vestager, who added that Apple had paid just one per cent tax on its European profits in 2003 and a mere 0.005 per cent in 2014 thanks to the illegal tax benefits Ireland had granted.
The iPhone giant rejects the EU rulingAfter the ruling, Apple issued a strongly-worded statement warning of the implications for future investment and job creation in Europe, where it currently employs 22,000 people. "The European Commission has launched an effort to rewrite Apple's history in Europe, ignore Ireland's tax laws and up-end the international tax system in the process," the company said. "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. 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."
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Michael Noonan, Ireland's finance minister, said that he, too, profoundly disagreed with the commission's verdict and denied doing a deal with Apple. "Our tax system is founded on the strict application of the law, without exception," he said. It was necessary for the Dublin government to fight the verdict "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".Mr Noonan added: "It is important that we send a strong message that Ireland remains an attractive and stable location of choice for long-term substantive investment."