979 ArchivesEuropean Commission has estimated that Apple has to pay €13 billion ($14.5 billion) in retroactive taxes to Ireland after an in-depth state aid investigation.
SEE ALSO: The Apple Store is now simply 'Apple,' company saysThe 130-page ruling by EU competition commissioner Margrethe Vestager follows a three-year probe into Apple's Irish tax affairs.
It establishes that Ireland violated EU law on competition by giving Apple tax benefits which are not available to other companies.
"The European Commission has concluded that Ireland granted undue tax benefits of up to €13 billion to Apple," reads the ruling. "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."
Those advantages - which amount to "illegal state aid", according to the ruling - were made during a ruling made by the Irish government in 1991 and 2007.
According to Commissioner Vestager, Apple only paid "an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014." Irish corporate tax is at 12.5 percent.
Apple's company structure enabled it to "avoid taxation on almost all profits generated by sales of Apple products" in the EU single market, the ruling said.
"This is due to Apple's decision to record all sales in Ireland rather than in the countries where the products were sold."
The ruling is likely to increase tension between Brussels and the US, which called on EU authorities to drop the case.
The U.S. Treasury Department has accused the commission of becoming a "supranational tax authority" and said disproportionately targeting US companies could end up costing American taxpayers.
Apple and Ireland deny any wrongdoing and will likely appeal against the ruling.
The Irish finance minister, Michael Noonan, said he would seek approval from the Irish Cabinet to appeal the EU Commission's ruling to European courts.
"It is important that we send a strong message that Ireland remains an attractive and stable location of choice for long-term substantive investment," Noonan said, according to The Associated Press.
The U.S. tech giant employs 6,000 people in Ireland, mostly at its main site in Cork.
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