EU orders Apple to pay Ireland US $14.5 bil. in back taxes
EU antitrust regulators have ordered Apple to pay back the Irish government up to 14-and-a-half billion U.S. dollars in taxes.
The largest tax penalty in European history has prompted rebukes from Apple, along with the Irish and U.S. governments.
Our Kim Hyesung reports.
The European Commision ordered Apple on Tuesday to pay nearly 15 billion U.S. dollars in back taxes to Ireland, plus interest.
"Apple's tax benefits in Ireland are illegal. Two tax rulings granted by Ireland have artificially reduced Apple's tax burden for over two decades in breach of EU state aid rules."
The Commission's three-year investigation into favorable tax deals in the EU concluded that Apple had paid substantially less to the Irish government than other bussinesses.
The standard rate of Irish corporate tax is 12-and-a-half percent but the Commision said Apple had effectively paid only 1 percent on its European profits in 2003 and about point-0-0-5 percent in 2014.
Both Apple and Ireland said they disagreed with the record penalty and would appeal against the ruling.
In a letter published on its website, Apple said "the ruling will have a profound and harmful effect on investment and job creation in Europe."
The European Commission's order also drew rebukes from the Obama administration, which said the move could undermine the economic partnership between the U.S. and Europe.
"We are concerned about a unilateral approach in state aid negotiations that threaten to undermine progress that we have made collaboratively with the Europeans to make the international taxation system fair.
Low corporate tax rates in Ireland -- the lowest, in fact, among OECD member countries -- have drawn hundreds of multinationals like Facebook and Google to Dublin.
The landmark ruling is likely to affect not only the Irish economy but also become a source of contention between the U.S. and Europe.