Apple's CEO Tim Cook has hit back after the European Commission ruled that the global tech firm must pay €13bn (£11bn) in back taxes to Ireland.
Apple has been running its European operations from Cork, Ireland, since 1980. The European Commission released a report yesterday stating that due to what it believes was a special deal with the Irish government, Apple paid one per cent tax in 2003, down to 0.005 per cent in 2014.
But Cook (pictured) released a letter to customers on the company's website yesterday, in which he said the claim that Ireland gave Apple a "special deal" on taxes had "no basis in fact or law".
"Over the years, we received guidance from Irish tax authorities on how to comply correctly with Irish tax law – the same kind of guidance available to any company doing business there," he said. "In Ireland and in every country where we operate, Apple follows the law and we pay all the taxes we owe. We never asked for, nor did we receive, any special deals."
Ireland's minister for finance, Michael Noonan, "disagrees profoundly" with the Commission's ruling, and is seeking the Cabinet's approval to appeal the decision.
The department of finance said in a statement: "Ireland's position remains that the full amount of tax was paid in this case and no state aid was provided. Ireland did not give favourable tax treatment to Apple. Ireland does not do deals with taxpayers."
Noonan added: "The decision leaves me with no choice but to seek Cabinet approval to appeal the decision before the European Courts. 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."
Cook said Apple will also appeal against the ruling, adding that he thinks the Commission's decision is not about how much tax Apple pays, but rather "which government collects the money".
"We are confident that the Commission's order will be reversed. Taxes for multinational companies are complex, yet a fundamental principle is recognised around the world: a company's profits should be taxed in the country where the value is created. Apple, Ireland and the US all agree on this principle.
"In Apple's case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the US. European companies doing business in the US are taxed according to the same principle. But the Commission is now calling to retroactively change those rules."
At a press conference following the ruling, Europe's competition commissioner Margrethe Vestager said: "This decision sends a clear message. Member states cannot give unfair tax benefits to selected companies, no matter if they are European or foreign, large or small, part of a group or not. This is not a penalty, this is unpaid taxes to be paid."
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