After a three-year investigation, the European Commission has concluded that Ireland should recover 13 billion euros (about $14.5 billion) in back taxes from Apple, saying the company’s deal in that country was illegal, the BBC reports. The commission said Apple paid substantially less than other companies, ending up with a corporate tax rate of no more than 1 percent while other companies pay around 12.5 percent. “Member states cannot give tax benefits to selected companies — this is illegal under EU state aid rules,” Commissioner Margrethe Vestager said.
Both Ireland and Apple said they disagreed with the penalty and planned to appeal the ruling. In an open letter to the company’s European customers, Apple CEO Tim Cook talked up the company’s long history in Ireland and its status as the country’s largest taxpayer despite the preferential rate. Cook said the company has followed the guidance of Irish tax authorities and accused the European Commission of launching an effort to “rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process.” He said the move is unprecedented and shows the Commission is trying to overwrite Ireland’s own tax laws with its own arbitrary rules. “We never asked for, nor did we receive, any special deals,” Cook wrote. “We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don’t owe them any more than we’ve already paid.”
Apple’s battle with the EU over its Irish tax deals has drawn a lot of attention in other countries as well. A recent Daily Mail investigation questioned whether Apple is paying its fair share of taxes in the U.K., but other world leaders see the heightened scrutiny in Europe as an opportunity to lure the tech giant to their countries. After today’s ruling, Mehmet Simsek, Deputy Prime Minister of Turkey, also made his opinion known on Twitter, saying, “Apple should move to Turkey. Happy to provide more generous tax incentives. Won’t have to deal with EU bureaucracy.”