TheCable

The European Commission on Tuesday ruled that Apple Inc. should pay Ireland as much as €13bn (£11bn) – worth 15 million iPhones – in back taxes.

According to the commission, Ireland granted undue tax benefits of up to €13 billion to Apple.

“This is illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. Ireland must now recover the illegal aid,” the commission said in a statement.

Margrethe Vestager, commissioner in charge of competition policy, said: “Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules.

“The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years.

“In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014.”

According to BBC, the standard rate of Irish corporate tax is 12.5%.

In a statement released after the ruling, the tech giant said the commission was making an effort to rewrite Apple’s history.

“The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process,” Apple 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.”

Michael Noonan, Ireland’s finance minister, also disagreed with the European commission on the ruling, saying: “I disagree profoundly with the commission. 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.”