The European Union on Tuesday ordered Apple to pay a record 13 billion euros in back taxes in Ireland, saying deals allowing the U.S. tech giant to pay almost no tax were illegal.
The EU said the Irish government was wrong in giving special benefits to certain companies.
However, Apple and the Irish government immediately said they would appeal against the European Commission ruling, while the U.S. Treasury said it could undermine its economic partnership with the EU.
Ireland has been seeking to attract multinationals by offering extremely favourable tax conditions, known as sweetheart deals, but EU Competition Commissioner Margrethe Vestager said Apple’s broke EU laws on state aid.
“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,” Vestager said.
“This is not a penalty, this is unpaid taxes to be paid,” Vestager added.
Apple said the decision would be harmful for jobs.
“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,” the company said in a statement.
“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.”
The Irish government held a similar view.
“I disagree profoundly with the Commission,” said Ireland’s finance minister, Michael Noonan, in a statement.
“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.”
Dolapo is a writer and journalist who works with YNaija. He has interests in Christianity, politics and sports.