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Does Apple pay tax? | Why doesn't Apple pay more tax: Complete guide to Apple's tax affairs

David Price | Sept. 2, 2016
Apple is in trouble with a really scary foe: the tax man

Margrethe Vestager, the European competition commissioner, said: "Member states cannot give tax benefits to selected companies. This is illegal under EU state aid rules."

Apple's letter to customers implies that such deals would have been available for anyone - or the guidance it received from the Irish government before reaching its present arrangement was, at any rate.

Why doesn't Ireland want the money?

It's been pointed out that 13 billion euros is a lot of money to pay to 6,000 people in work. The government could give each of those people a million euros and still have more than half of the money left over. So why is Apple able to state that it finds itself "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"?

Well, there are larger questions to ponder. The Irish government is probably concerned that, if it is obliged to make its tax laws more stringent towards large companies, large companies will be less inclined to invest there. So this isn't just about the "nearly 6,000 people" that Apple says it employs in Ireland; it's about all the jobs and tax revenue that will be lost if the tech industry at large changes its mind about Ireland being a convenient and tax-favourable base from which to do business in Europe.

That's the practical aspect, but non-cynics may also feel that Ireland is justified in resisting outside interference in its tax laws.

"The decision leaves me with no choice but to seek cabinet approval to appeal," said Irish finance minister Michael Noonan. "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."

Will Apple have to pay its tax bill, or will this be overruled on appeal?

The Irish government is appealing against the ruling, but it's hard to say if they will be successful. Apple says it's confident.

 

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