European authorities ruled on Tuesday that Apple struck a sweetheart deal with Ireland that allowed the tech giant to underpay its taxes by more than $14.5 billion over a 10-year period.
Apple runs its European operations from Ireland, which has a 12.5 percent corporate tax rate. But its agreement with the Irish government that allowed Apple to pay a tax rate of just 1 percent or even less – .0005 percent, in some years – according to the European Commission, which launched an investigation into Apple’s tax strategies in 2014.
Apple must now repay those taxes, the commission ruled.
“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,” said European Commissioner Margrethe Vestager, who is in charge of competition policy. “Member States cannot give tax benefits to selected companies.”
Both Apple and Ireland said they would appeal.