One of the ways companies can try to save money for themselves is through taxes, in which through various tax loopholes and whatnot, they can deduct bits and pieces here and there so that the final amount isn’t as huge as it should have been. However sometimes this practice can be a bit iffy depending on how closely a company is being scrutinized.Unfortunately for Apple, it looks like they have recently been asked by the EU to pay Ireland back in taxes worth $14.5 billion. According to the reports, Apple and Ireland apparently had some kind of sweetheart tax deal between both of them, but the authorities have ruled that this amounts to illegal state aid.
The deal would have allowed Apple to pay a maximum of 1% in taxes, versus the usual rate for corporations of 12.5%. According to European competition commissioner, Margrethe Vestager, “Member states cannot give tax benefits to selected companies – this is illegal under EU state aid rules.”
Apple’s CEO Tim Cook has since fired back at the ruling by saying, “Beyond the obvious targeting of Apple, the most profound and harmful effect of this ruling will be on investment and job creation in Europe. Using the commission’s theory, every company in Ireland and across Europe is suddenly at risk of being subjected to taxes under laws that never existed.” Both Apple and Ireland are planning on appealing the ruling.