Brussels | The EU ordered tech giant Apple to pay a record 13 billion euros in back taxes in Ireland, a move Washington warned could damage hugely important transatlantic economic ties.
Brussels said Apple, the world’s most valuable company, avoided virtually all tax on its business in the bloc by illegal arrangements with Dublin which gave the company an unfair advantage over competitors.
Apple and the Irish government immediately said they would appeal against the European Commission ruling, with the iPhone maker warning it could cost European jobs.
The White House meanwhile cautioned against “unilateral” measures by the EU.
The company’s shares lost some of their shine after the ruling, down 0.7 per cent in early afternoon trading, making for a more than 3 per cent loss over the past two weeks ahead of the highly anticipated ruling.
“This decision sends a clear message. Member states cannot give unfair tax benefits to selected companies, no matter if European or foreign, large or small,” EU Competition Commissioner Margrethe Vestager said.
“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,” she added.
Ireland has attracted multinationals over many years by offering extremely favourable sweetheart tax deals to generate much-needed jobs and investment.
But after a three-year investigation Brussels said the arrangement with Apple broke EU laws on state aid.
The findings come amid growing tensions between Washington and Brussels over a series of EU anti-trust investigations targeting other giant US companies such as Google, Amazon, McDonald’s, Starbucks and Fiat Chrysler.
Apple has had a base in the southern city of Cork since 1980 and employs nearly 6,000 people in Ireland, through which it routes its international sales totalling billions.
Apple chief Tim Cook said he was “confident” the EU ruling would be overturned, adding that the Silicon Valley giant was the biggest taxpayer in Ireland, the United States and the world.
“The most profound and harmful effect of this ruling will be on investment and job creation in Europe,” he said.
Cook also warned that the ruling was a “devastating blow to the sovereignty of EU member states over their own tax matters”, echoing the concerns of Dublin over the decision.
Ireland’s Finance Minister Michael Noonan described the ruling as “bizarre” and “an exercise in politics by the Competition Commission”.