EU hits Apple with $14.6 billion tax bill

Kurzweil · 2016-08-31T07:03:33+00:00

Ireland must recover up to 13 billion euros ($14.6 billion) in unpaid taxes from Apple, European officials said on Tuesday. The tax ruling is the biggest the European Union has ever made regarding a single company, and it could spark a huge transatlantic row over how Europe treats U.S. companies. Apple shares initially fell almost 3%, but then recovered most of their losses. The company will appeal the decision. It said the ruling upended the international tax system and would damage jobs and investment in Europe. The European Commission, which administers EU law, said the Irish government had granted illegal state aid to Apple (AAPL, Tech30) by helping the tech giant to artificially lower its tax bill for more than 20 years. "[EU] member states cannot give tax benefits to selected companies -- this is illegal under EU state aid rules," said Commissioner Margrethe Vestager, Europe's top antitrust official. The United States fired back immediately, saying retroactive tax assessments by the EU were unfair. "The Commission's actions could threaten to undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the U.S. and the EU," a Treasury spokesperson said. The decision amounted to "a transfer of revenue from U.S. taxpayers to the EU," White House press secretary Josh Earnest said. The Obama administration would fight for "American taxpayers and American businesses overseas when they're being treated unfairly," he added. Apple paid tax at 1%, or less, on profits attributed to its subsidiaries in Ireland, well below the 35% top rate of corporate tax in the United States and Ireland's 12.5% rate. That prompted complaints by both European and U.S. lawmakers, who argued that Apple had been given an unfair advantage in exchange for creating jobs in Ireland. CEO Tim Cook was even called to testify on Apple's tax arrangements with Ireland before a Senate committee in 2013. The bill for tax benefits, plus interest, covers 2003 to 2014. Apple has more than $231 billion in cash on its balance sheet to cushion the blow. Cook said on Tuesday the ruling had "no basis in fact or in law," calling it "obvious targeting of Apple." Apple had helped create and sustain more than 1.5 million jobs across Europe, follows the law and pays all the taxes it owes, he added. "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," he wrote. Ireland said it will appeal the decision, saying Apple paid what it owed. The country has one of the lowest corporate tax rates in Europe, which makes it an attractive place for global companies. The Irish government is afraid companies would be less likely to invest in Ireland if its tax regime changes, which could cost the country thousands of jobs. Source: CNN

Thread starter Kurzweil
Start date Aug 31, 2016

Kurzweil

JF-Expert Member

Aug 31, 2016

Kamanda wa Kweli

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