Apple to fight £11 billion tax ruling

Apple has officially filed an appeal against a European Union ruling that it should pay up to €13bn (£11bn) in back taxes in the Republic of Ireland having been charged in August 2016.

Earlier this year, the EU decided that the company’s tax arrangements in Ireland were illegal, and demanded a record penalty, but in a statement the tech giant said it has been singled out as "a convenient target".

Ireland has also contested the decision, claiming that EU regulators were interfering with national sovereignty. Ireland’s finance ministry said that the European Commission had "misunderstood the relevant facts and Irish law".

Apple said that as a result of the ruling, the company would pay 40 per cent of all the corporate taxes collected in Ireland. The company claims it paid a 26 per cent tax rate on its worldwide earnings, but said it was correct that it paid most of that in the US.

"Because our products and services are created, designed and engineered in the US, that’s where we pay most of our tax… this case has never been about how much tax Apple pays, it’s about where that tax is paid."

Corporate tax in Ireland is 12.5 per cent and the EU ruling found that Apple was paying as little as one per cent in tax. "Ireland did not give favourable tax treatment to Apple – the full amount of tax was paid in this case and no state aid was provided," said the finance ministry. "Ireland does not do deals with taxpayers."

This ruling comes after a similar scenario in the Netherlands with Starbucks, when the company was instructed to pay £25.6 million in unpaid back taxes. 

Apple’s general counsel, Bruce Sewell told Reuters: “Apple is not an outlier in any sense that matters to the law. Apple is a convenient target because it generates lots of headlines.” 

Should the iPhone-maker lose its appeal it is unlikely to have much of an impact on the company’s business which saw a net profit of $53bn in the 2015 financial year.

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