Apple (AAPL) is down just 0.68% in early morning trade on Tuesday following the announcement from the European Union that the company will need to make a $14.5 billion tax payment.
The announcement comes as an EU tax crackdown is hitting several companies.
A few things to know following the announcement are:
Ireland slashed the company’s tax bill between 2003 and 2014. The EU found that Ireland illegally cut the company’s tax bill, which is a part of the EU’s effort to cut back on tax loopholes. Selective tax treatment allowed Apple to have an unfair advantage over other companies.
The European Union has been targeting companies that may have been involved in tax avoidance for the past three years. Apple, the world’s richest company, has faced the largest tax penalty since the EU began investigating tax avoidance.
Apple has vowed to fight the tax bill.
Apple’s tax rate was as low as 1% on European profits in 2003, but the tax rate fell to an unprecedented low of 0.005% as of 2014, according to Margrethe Vestager, EU Competition Commissioner, reports Bloomberg.
The U.S. Treasury Department is not happy with the decision of the EU. The Treasury has tried to stop state probes, and warned the EU that they may harm foreign investment as a result. The Treasury has stated that the decision could undermine the partnership between the U.S. and EU.
Ireland’s Michael Noonan, Finance Minister, stated, “I disagree profoundly with the commission’s decision.”
Apple employs over 6,000 people in Ireland. Many fear that the company may move their operations out of the country, which would be a major blow to the Irish economy. Ireland’s corporate tax rates are just 12.5% and have lured more than 700 companies from the United States to the country.