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29 March 2024

Apple slapped with fine worth up to $14.5bn by EU

Published
By Reuters

The European Union's anti-trust body has slapped a fine on Apple worth up to EUR13 billion ($14.5 billion) following a three-year investigation into the corporation's sweetheart tax pact with the Irish government.

Apple and Ireland are likely to appeal against the decision.

EU competition commissioner Margrethe Vestager has ruled that deals between the company and the Irish tax authorities in 1991 and 2007 contravened EU rules on  state aid, which outlaw preferential treatment for individual companies.

The deals enabled Apple to channel European sales through Ireland and benefit from an ultra low-tax bill - sliding from 1 per cent of its European profits in 2003 to 0.005 per cent in 2014.

Now Apple will have to pay back the money they pocketed from those arrangements, with the Irish government ordered to calculate the exact sum.

Vestager said in a statement Tuesday: "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."

Other US companies and the US government have been following the case with growing unease.

The US Treasury said last week the EU executive arm, the European Commission, would be acting as a "supra-national tax authority" if it overrides the tax decisions of individual countries.