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EU Competition Commissioner Margrethe Vestager speaking today. Virginia Mayo/PA
apple tax

Other EU countries could claim a portion of Ireland's €13 billion in back taxes from Apple

Vestager said other EU countries can try to prove some of Apple’s profits funnelled through Ireland were based on sales in their territories.

THE EUROPEAN COMMISSION has ruled that Apple must repay €13 billion in unpaid taxes to the Irish Government – but other countries could claim a slice of the pie.

Finance Minister Michael Noonan has said he “disagreed profoundly” with the ruling on illegal state aid, and has vowed to seek Cabinet approval to appeal the decision to the European Court of Justice.

Apple themselves have also indicated, in which it was found to have paid a tax rate of just 0.005% on its European profits by 2014.

European Commissioner for Competition Margrethe Vestager today said the “so-called head office only existed on paper – it has no employees, no premises and no real activities”.

In 2011, Apple Sales International recorded €16 billion in profit – but less than €50 million from this was taxed.

Vestager said other EU countries will now have the option to try and take a piece of the tax pie if they can prove some of Apple’s profits funnelled through Ireland were based on sales in their territories.

“In fact, the tax treatment in Ireland enabled Apple to avoid taxation on almost all profits generated by sales of Apple products in the entire EU Single Market,” she said.

“This is due to Apple’s decision to record all sales in Ireland rather than in the countries where the products were sold. This structure is however outside the remit of EU state aid control.

If other countries were to require Apple to pay more tax on profits of the two companies over the same period under their national taxation rules, this would reduce the amount to be recovered by Ireland.

She added: “The amount of unpaid taxes to be recovered by the Irish authorities would be reduced if other countries were to require Apple to pay more taxes on the profits recorded by Apple Sales International and Apple Operations Europe for this period.”

The amount of unpaid taxes to be recovered by the Irish authorities would also be reduced if the US authorities were to require Apple to pay more to their US parent company, to finance research and development efforts.

If the Irish Cabinet decides to appeal the Commission’s decision, it must still recover the illegal state aid but could, for example, place the recovered amount in an escrow account pending the outcome of the EU court procedures.

Read: I wouldn’t bet on Brexit actually happening, says Germany’s EU Commissioner

Read: Ireland’s sweetheart tax deal for Apple was worth up to €13 billion over a decade

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