EU slaps Apple with 13bn fine over tax
Scheme to route profits is ‘illegal’
EU ANTITRUST regulators ordered Apple yesterday to pay up to 13 billion (R209bn) in taxes plus interest to the Irish government after ruling that a special scheme to route profits through Ireland was illegal state aid.
The massive sum, 40 times bigger than the previous known demand by the European Commission to a company in such a case, could be reduced, the EU executive said, if other countries sought more tax themselves from the US tech giant.
Apple, which with Ireland said it would appeal the decision, paid tax rates on European profits on sales of its devices and services of between just 0.005 percent in 2014 and 1 percent in 2003, the commission said.
“Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years,” said Competition Commissioner Margrethe Vestager, whose crackdown on mainly US multinationals has angered Washington, which accuses Brussels of protectionism. Facing probes Online retailer Amazon.com and hamburger group McDonald’s face probes over taxes in Luxembourg, while coffee chain Starbucks has been ordered to pay up to 30 million to the Dutch state.
A bill of 300m this year for Swedish engineer Atlas Copco to pay Belgian tax is the current known record. Other companies ordered to pay back taxes in Belgium, many of them European, have not disclosed figures.
For Apple, whose earnings of $18bn (R259bn) last year were the biggest ever reported by a corporation, finding several billion dollars should not be an insurmountable problem. The 13bn represents about 6 percent of the firm’s cash pile.