Ireland has officially been ordered by the European Union to retrieve almost $14.5 billion in taxes from Apple as the result of a deal that allowed the company to avoid almost all corporate taxes across the coalition for over a decade.
Apple will reportedly appeal the decision and claims to have paid all taxes in Ireland that the company was due. The tax payment is the highest ever demanded by the EU, and will be pursued under rules that prohibit countries from assisting companies in gaining financial advantages over others.
In an open letter to the Apple community in Europe, penned by Tim Cook, he described the company’s presence in Ireland. Apple opened its first plant in Cork, Ireland in 1980 with just 60 employees. That presence has grown to almost 6,000 employees across Ireland today.
Tim Cook writes that in addition to contributing to the growth of the Irish economy, Apple is also proud of its contributions to local communities across Europe as one of the largest tax payers in the world.
“As responsible corporate citizens, we are also proud of our contributions to local economies across Europe, and to communities everywhere. As our business has grown over the years, we have become the largest taxpayer in Ireland, the largest taxpayer in the United States, and the largest taxpayer in the world,” he wrote.
According to reports by the Wall Street Journal, the tax agreement offered to Apple in 2007 allowed the company to pay between zero and one percent on its European profits for more than ten years by designating just a small segment of its profit to a taxable Irish branch.
Essentially, the EU determined that the tax structure offered to Apple was neither legal nor offered with any economic justification.
Tim Cook states that Apple, Ireland and the United States share the understanding that a company’s profits should be taxed in the country where the value is created, and goes on to claim that the EU wants to see that standard changed.
Cook goes on to write that while Apple is a great supporter of international tax reform to promote “simplicity” and “clarity,” new rules shouldn’t be applied retroactively. He claims that companies across Europe are in danger of being targeted under laws that never before existed.
The United States has criticized the EU’s tax investigations, claiming that the bloc disproportionately targets American companies.
Apple recently released a statement to its investors regarding the EU’s ruling to address any concerns about the company’s tax rate and financial earnings going forward, and assured its investors that the company would be virtually unaffected by these circumstances.
Apple has warned investors that the process of appealing the Commission’s decision could take upwards of several years.
Related: Apple to unveil next iPhone on September 7
[source]Apple[/source]
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