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Ireland Must Recover $14.6 Billion from Apple
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Apple in Ireland

Summary: Ireland has been placed responsible for recovering over $14 billion in unpaid tax from Apple.

In landmark ruling by the European Union, Apple must turn over $14.6 billion in unpaid taxes to Ireland. The tax ruling is the largest the organization has ever made against a single company and may open doors for how other American companies are treated in Europe.


With the announcement, Apple shares dropped nearly 3 percent but have since recovered. Apple will of course appeal the ruling, arguing that the decision upends the international tax system and damages jobs and investments in Europe.

The EU law administration, the European Commission, said that Ireland had given illegal state aid to apple for over 20 years to help them lower their tax bill. Commissioner Margrethe Vestager, Europe’s top antitrust official said, “EU member states cannot give tax benefits to selected companies – this is illegal under EU state aid rules.”

Read Apple Paid Less Than 2% Corporate Tax Outside of the United States.

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The United States, on behalf of Apple and other U.S. companies responded, “The Commission’s action 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.” They argue that retroactive tax assessments are unfair.

Apple was paying a 1 percent tax on profits credited to its affiliates in Ireland. The typical top corporate tax rate is 35 percent in the United States and 12.5 percent in Ireland. European and U.S. lawmakers were upset that Apple was given an advantage in exchange for creating jobs in the country.

See Apple May be Forced to Pay Back Millions in Taxes.

The unpaid tax bill covers from 2003 to 2014 but luckily Apple as over $231 billion in cash on their balance sheet to make the blow less damaging.

Apple has created and sustained over 1.5 million jobs in Europe. Ireland will also appeal the decision, declaring that Apple has paid what they owe. Ireland has one of the lowest corporate taxes in Europe in an effort to attract companies to their country.

Starbucks and Fiat Chrysler are in the same boat as Apple. They have been required to pay back million in taxes because of deals they had with other European countries that saved them money. Amazon, McDonalds, and Google are facing inquiries into their tax arrangements in European countries.

Do you think it is fair for the European Commission to dictate what tax arrangements countries make with American companies? Tell us your thoughts in the comments below.

To learn more about the tax arrangements, read Apple Cuts Tax Bill by Billions with Profit Allocation Methods.



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