Concluding a two-year long investigation, the European Commission has ordered Apple to pay up to €13 billion ($14.5 billion) in back taxes for its subsidiaries in Ireland. The Commission argues that Apple received “undue tax benefits” between 2003 and 2014, violating EU state aid rules.
As our chart illustrates, Apple’s provisions for income taxes outside of the United States amounted to just $4.89 billion during said period. According to the European Commission’s statement, the company paid an effective tax rate ranging from 1 percent in 2003 to 0.005 percent in 2014 on its European profits during the time. To put that in perspective, Apple paid an effective tax rate of 26.1 percent in the United States in 2014, with income taxes adding up to almost $60 billion between 2003 and 2014.
Both Apple and Ireland have already denied the Commission’s allegations and announced that they are going to appeal against today’s ruling. It will be interesting to see how this plays out in the end, as it may be the first case of a company being ordered to pay back taxes to a government that doesn’t even want the money.
This chart shows how much Apple paid in income taxes outside the United States between 2003 and 2014.