Apple slams European Commission over £11bn tax ruling

The EU ruled Apple’s tax arrangements in Ireland were illegal and demanded the record penalty in August

Tim Cook previously said the European Commission ruling is ‘total political crap’ and ‘maddening’ (Stephen Lam/Getty)

Apple has hit back at Brussels after filing an appeal against the European Commission’s ruling that it must pay €13bn (£11bn) in back tax to Ireland.

The iPhone maker said it has been singled out and was “a convenient target”.

Apple chief executive Tim Cook previously said the European Commission ruling is “total political crap” and “maddening”.

The case concerns Apple’s historic reporting of Europe-wide profits through Ireland, which charges the tech firm only for sales on its own territory at Europe-low rates of 12.5 per cent.

Apple said in a statement issued on Monday: “The Commission took unilateral action and retroactively changed the rules, disregarding decades of Irish tax law, US tax law, as well as global consensus on tax policy, that everyone has relied on.

“If their opinion is allowed to stand, Apple would pay 40 per cent of all the corporate income tax collected in Ireland, which is unprecedented and, far from levelling the playing field, selectively targets Apple.”

The company said the ruling had “no basis in fact or law” and is confident the decision will be overturned.

Ireland is also contesting the decision.

The European authorities accused Ireland of helping Apple to avoid tax by means of a so-called “sweetheart deal” that is in breach of EU rules. Commissioner Margrethe Vestager, who oversees competition policy, said this allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003, falling to just 0.005 per cent in 2014.

The Irish finance ministry said the European Commission had misunderstood both Irish law and had exceeded its powers, seeking to breach Ireland’s sovereignty in national tax affairs.

“Ireland did not give favourable tax treatment to Apple – the full amount of tax was paid in this case and no state aid was provided,” the ministry said in a statement on Monday.

“Ireland does not do deals with taxpayers.”

The ruling means Ireland stands to gain an additional £11bn from unpaid taxes.

However, Ireland’s decision to appeal – rather than take the money – is based around its economy’s dependence on foreign companies.

This means the ruling could be a devastating blow to a country that has thrived for decades on attracting foreign investment through its favourable tax regime.

About 1,000 such firms, including Facebook and Google, have their European headquarters in Ireland, due mainly to its headline rate of corporate income tax, which is the second-lowest in the EU.

The Commission has become much more aggressive in its approach to the agreements struck between multinational companies and EU member states. Previously it ordered the Dutch authorities to recover €30m (£26m) from Starbucks with a similar amount due to Luxembourg from Fiat Chrysler.

Meanwhile, Amazon and McDonald’s are in the frame over deals struck with Luxembourg.