Apple has denied it owes the Irish state €13bn ($14.5bn) in back tax, challenging the ruling made by the European Commission today (30 August) which found the company had been given illegal tax breaks by the Irish government.
“In Ireland and in every country where we operate, Apple follows the law and we pay all the taxes we owe," said the company’s chief executive Tim Cook in a lengthy customer letter to combat the outcome of the three-year investigation.
In a scathing analysis of the EU’s position, Cook said that the “European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process,” adding that the “claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals".
Furthermore, the move was branded “unprecedented” with “serious, wide-reaching implications” with claims such aggressive tax pursuit could harm “investment and job creation in Europe”.
Cook reminded that Apple has been in Cork since 1980 and said it now employs nearly 6,000 people across Ireland.
Due to a deal established with the Irish tax authorities in 1991, Apple was able to set up what the EU commission described as a nonexistent head office which had no employees or physical premises. The the majority of the profits from its Apple Sales International and Apple Operations divisions in the EU were funneled, untaxed, through this 'head office'.
The company paid a tax rate of one per cent on its European profits in 2003, dropping to 0.005 per cent in 2014 - the equivalent of just €50 for every €1m in profit.
The European Commission ruled that Apple had illegally been in receipt of tax benefits amounting to some €13bn by the Irish authorities, which is similarly rebuffing the decision in a bid to protect the country's attractiveness to foreign investment.
During the announcement of the ruling, Commissioner Margrethe Vestager denied Apple was being issued with a penalty, instead claiming, "this is unpaid taxes to be paid”.