Apple was slapped with a record $ 14.5 billion tax penalty by the European Commission on Tuesday for its agreements with Ireland, and the country is currently deliberating whether or not it will appeal against the ruling.
Ireland’s corporate tax rate is 12.5 percent on business profits. Apple was paying far less thanks to an agreement it made with the country back in the 1990s. That deal allowed the company to record all sales in Ireland rather than “in the countries where the products were sold.” In return, Apple brought jobs to Ireland.
While the EC has deemed the agreements as illegal state aid, Apple and Ireland have repeatedly said the company “follows the law.” Ireland’s Financial Minister Michael Noonan said he “disagreed profoundly” with the Commission’s ruling that will force Apple to pay $ 14.5 billion in back taxes to the country, according to Reuters.
The penalty is the highest ever issued by the Commission — the previous record fine was $ 1.4 billion and was imposed on EDF, a French energy group.
Ireland’s cabinet members are currently deliberating whether or not they should follow Noonan’s advice to appeal the Commission’s ruling. Ireland’s Independent Alliance party says it is reviewing the decision and needs to consult with Noonan, tax officials, and independent experts. Fianna Fail, another party, said it would back an appeal through the European courts, but the country’s third largest party — Sinn Fein — says Ireland should accept the Commission’s ruling, according to Reuters.
Meanwhile, the U.S. government is furiously looking for means to have tax money from Apple that was obtained by the European Union sent back, according to the New York Times. Congress has asked the U.S. Treasury to be tougher on European officials, claiming that the European Commission is “targeting U.S. companies disproportionately.”
Apple said it is appealing the decision, and CEO Tim Cook wrote an open letter discussing the ruling. You can read more here.