EU orders Apple to repay 13 bln euros to Ireland

The European Union (EU) said U.S. tech giant Apple must repay up to 13 billion euros (14.5 billion U.S. dollars) to the Irish government after ruling that some tax treatment granted by Ireland to Apple was illegal under EU state aid rules.

"The European Commission has concluded that Ireland granted undue tax benefits of up to 13 billion euros to Apple. This is illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses," the statement said.

Ireland must now recover the unpaid taxes in Ireland from Apple for the years 2003 to 2014 of up to 13 billion euros, plus interest, it added.

Margrethe Vestager, the EU Commissioner in charge of competition, said "selective treatment" in Ireland allowed Apple to pay an effective corporate tax rate of 1 percent on its European profits in 2003 down to 0.005 percent in 2014.

However, both Ireland and Apple said that they plan to appeal the Commission's ruling.

Michael Noonan, the Irish Minister for Finance, said he would seek permission from the Irish Cabinet to appeal the Commission decision to the European Courts.

"I disagree profoundly with the Commission's decision. Our tax system is founded on the strict application of the law, as enacted by the Oireachtas (parliament), without exception," Noonan said.

"It is important that we send a strong message that Ireland remains an attractive and stable location of choice for long-term substantive investment. Apple has been in Ireland since the 1980s and employs thousands of people in Cork. The company has continued to expand its operations in Ireland in recent times," he added.

Apple CEO Tim Cook has published an open letter to customers in Europe, after the European Commission announced its decision.

"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 said in the letter.

"The opinion issued on Aug. 30 alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law," he added.

Cook said Apple plan to appeal the Commission's ruling and he was confident that the Commission's order would be reversed.

The U.S. Treasury Department was widely reported to be "disappointed" with the European Commission's decision.

"We believe that retroactive tax assessments by the Commission are unfair, contrary to well-established legal principles and call into question the tax rules of individual Member States," a spokesperson for the department said.

The case could undermine "the important spirit of economic partnership between the United States and the EU," the spokesperson added.

In 1980, Apple established its first operations in Europe by opening a factory in Cork, Ireland with 60 employees.

Source : XINHUA