It looks like the tax man is going to come calling on Apple’s operations in Ireland. Following a three-year investigation, the European Union’s competition commissioner, Margrethe Vestager, has issued a 130-page judgment on the company. Essentially, the EU has found that Apple received special “illegal state aid” from Ireland: The company was allowed to reduce its tax bill in order to keep its operations in the country. The result is that Apple could end up paying a lot of back taxes.
Tech companies often look for tax loopholes, allowing them to list their intellectual property in different places to pay the smallest amount of taxes. It’s not a problem unique to the tech industry, of course, but some aspects of that industry do make tax dodging a little different.
The fine, at 13 billion Euros ($14.5 billion), is the largest in the EU’s history, and Apple may have to issue new financial statements and restate accounts in Ireland.
The U.S. Treasury has warned that trying to get back taxes from Apple could create an “unfortunate precedent” but that doesn’t seem fair to the EU. If you want to do business in the EU, or in any country for that matter, it’s only fair to pay the taxes associated with that business. From the sound of it, the deal that Apple got allowed them to increase their bottom line while Ireland, and the EU, shouldered the cost. What’s more, Ireland’s economy has been in a rough spot for a while, and such a deal implies that Apple threatened to leave—which would hurt the nation’s economy even more—without some kind of deal.
Apple CEO Tim Cook has criticized international taxes and doesn’t think that Apple has gotten a fair deal. He claims that Apple didn’t get any special treatment from Ireland. As of September 1, 2016, the company had not released an official statement in response.