Apple Inc. (ticker: AAPL), the world’s most valuable public company, will have to pay 13 billion euros ($14.6 billion) in back taxes to Ireland, the European Commission ruled, because the technology giant had been receiving illegal state aid in the form of a lower tax rate.
The ruling Tuesday follows a multiyear inquiry into the relationship between Apple and Dublin; it sought to find out whether Ireland broke EU law by giving Apple tax treatments that weren’t available to other companies.
Apple says it will appeal the ruling. CEO Tim Cook says the finding has “no basis in fact or in law.”
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In a disclosure to the Securities and Exchange Commission, Apple has said an adverse ruling in this case could end up being “material” to its finances. Apple’s shares were down 0.6 percent Tuesday after an initial 3 percent dip.
Starbucks Corp. (SBUX) and Fiat have both previously been ordered by the European Commission to pay back taxes, and Amazon.com (AMZN) is under investigation.
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Last month, Facebook (FB) was slapped with a tax bill from the Internal Revenue Service for between $3 billion and $5 billion for another Dublin-involved scheme. The IRS investigation stemmed from the fact that Facebook allegedly understated the value of intellectual property it transferred to Facebook Ireland in a bid to trim its tax bill.
Facebook’s fine would likely have a much bigger impact on the social network’s business than the EC ruling will have over Apple’s.
The fine itself represents a drop in the bucket for Apple, which has more than $230 billion in cash and investments to its name.
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The company’s newest version of the iPhone, its flagship product, will be announced on Sept. 7. It’s rumored to be the first iteration made without a headphone jack.
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Apple Inc. (AAPL) Said to Face Multibillion-Dollar Tax Bill in Ireland originally appeared on usnews.com
Update 08/30/16: This story has been updated to add details of the ruling and Apple’s response.
