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The Euro­pean com­mis­sion ruled that a sweet­heart tax deal be­tween Ap­ple and the Ir­ish tax author­i­ties amounted to il­le­gal state aid. The com­mis­sion said the deal al­lowed Ap­ple to pay a max­i­mum tax rate of just 1%. In 2014, the tech firm paid tax at just 0.005%. The usual rate of cor­po­ra­tion tax in Ire­land is 12.5%.

“Mem­ber states can­not give tax ben­e­fits to se­lected com­pa­nies - this is il­le­gal un­der EU state aid rules,” said the Euro­pean com­pe­ti­tion com­mis­sioner, Mar­grethe Vestager, whose in­ves­ti­ga­tion of Ap­ple's com­plex tax deal­ings has taken three years.

The com­mis­sion said Ire­land's tax ar­range­ments with Ap­ple be­tween 1991 and 2015 had al­lowed the US com­pany to at­tribute sales to a “head of­fice” that only ex­isted on pa­per and could not have gen­er­ated such prof­its.

The re­sult was that Ap­ple avoided tax on al­most all the profit gen­er­ated from its multi-bil­lion euro sales of iPhones and other prod­ucts across the EU's sin­gle mar­ket. It booked the prof­its in Ire­land rather than the coun­try in which the prod­uct was sold. Both Ap­ple and the Ir­ish gov­ern­ment were ap­peal­ing a rul­ing last month.

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