European Commission rules Apple should repay Irish government 13bn in unpaid tax

Apple could face an 11.1bn tax bill after the European Commission ruled that its tax arrangement with Ireland was illegal.

An ongoing investigation has concluded that the Irish government permitted Apple to pay significantly less than other businesses, with a tax rate that topped out at just one per cent, and was sometimes as low as 0.005 per cent. Ireland’s standard corporate tax rate is 12.5 per cent.

"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," Apple said in a statement.

"The Commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money. It will have a profound and harmful effect on investment and job creation in Europe. Apple follows the law and pays all of the taxes we owe wherever we operate. We will appeal and we are confident the decision will be overturned."

The Irish government is equally as upset.

"I disagree profoundly with the Commission," Ireland’s finance minister Michael Noonan said, as reported by the BBC.

"The decision leaves me with no choice but to seek cabinet approval to appeal. This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state aid rules into the sovereign member state competence of taxation."

Apple made a net profit of over 40bn in the 2015 financial year.