The European Union has ordered tech giant Apple to pay $15 billion in taxes.
The EU says Apple has been getting away with paying less tax because of dodgy deals done with Ireland, where companies are subject to a more lenient regime.
In a statement, the EU says: “The European Commission has concluded that Ireland granted undue tax benefits of up to €13 billion to Apple. This is illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. Ireland must now recover the illegal aid.”
The EU order is the result of what it says is an “in-depth” investigation into state aid launched in 2014.
Because its European head offices are located in Ireland, the EU says Apple got away with paying less that 1 per cent corporate tax, which fell to 0.005 per cent in 2014.
The EU adds that the Ireland “head offices” only existed on paper.
The Irish government was also criticised by the EU.
Commissioner Margrethe Vestager, in charge of competition policy, said: “Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules.
“The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years.
“In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014.”
The EU concluded that Apple must now pay €13 billion, plus interest.
Apple, one of the biggest companies in the world in any sector, says it pays all the taxes it owes and the EU’s demand will have “profound” implications.