BRUSSELS—Europe’s competition chief has ordered Ireland to reclaim €13 billion (£11.1 billion/$14.5 billion) in back taxes from Apple.
It comes despite the US treasury department warning last week that it would “consider its options” in such an eventuality.
Speaking at the European Commission’s headquarters in Brussels on Tuesday, Margrethe Vestager said: “Member states cannot give tax benefits to selected companies—this is illegal under EU state aid rules.”
The investigation, which started in 2014, has technically not found Apple guilty of wrongdoing. Rather it is a judgment that the so-called sweetheart tax deals Apple received from Ireland constitute illegal state aid.
Because the commission can order recovery of illegal state aid for up to 10 years before first request for information, Ireland must now recover the unpaid taxes from Apple for the years 2003 to 2014, plus interest.
“This is not a penalty, it is unpaid taxes to be paid,” said Vestager who was scathing about Apple’s activities. “The so-called ‘head office’ did no business. It had no employees, no premises. But under the tax ruling the so-called head office was attributed all the company’s profits for sales throughout Europe Africa, Middle East, and India,” she added.
“Tax rulings cannot endorse a method that fails to reflect economic activity or reality, for that matter,” the commissioner said.
Brussels’ officials said that Ireland allowed Apple to pay an effective corporate tax rate of one percent on its European profits in 2003 down to 0.005 per cent in 2014. These were determined by tax rulings granted in 1991 and 2007. This tax ruling was terminated in 2015.
“It is for the Irish authorities to determine the exact amount—working out …