Ireland Gave Illegal Tax Breaks To Apple, Shares Dip 2%

Shares of

fell more than 2 percent early Tuesday morning after the European Union slapped the company with a whopping 13 billion euro ($14.5 billion) bill for back taxes. The European Union concluded that Ireland gave Apple illegal state aid over many years.

quoted the European Union's Competition Commissioner Margrethe Vestager as saying that Ireland's illegal tax benefits which were granted to Apple enabled the company to "pay substantially less tax than other businesses over many years." Vestager added that the "selective treatment" allowed Apple to get away with paying an effective corporate tax rate of 1 percent on its European profits in 2003 which decreased to 0.005 percent in 2014. For every 1 million euros in profit, Apple paid just 500 euros in taxes, she also highlighted. Apple set up subsidiaries in Ireland and said they were not tax-resident in the country. In return, Ireland gave Apple special tax treatments so it won't risk hundreds of jobs that Apple created in the country. The Irish government said in a

that it "disagrees profoundly" with the ruling and is seeking cabinet approval to appeal the decision. The country's finance ministry argues that the full amount of taxes due were paid by Apple and no state aid was provided. "I disagree profoundly with the Commission," the Finance Minister Michael Noonan said. "The decision leaves me with no choice but to seek cabinet approval to appeal. This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state aid rules into the sovereign member state competence of taxation."