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Apple hit with 14 billion tax bill

The European Commission has issued a report indicating that Apple, the American manufacturer who produces iPhones, iPads, and Mac computers, received illegal tax savings from Ireland and is being find fourteen billion Euros.

Ireland is a long established tax haven for multi national companies who become domicile there for the low tax rates in the country, similar to the Cayman Islands and Luxembourg. Apple has long been criticized in the United States for not repatriating their earnings to the U.S. And paying taxes on it. Instead, the company has even went as far as borrowing money in the U.S. In order to pay a dividend and to buy back shares despite having billions of dollars available in international markets earning a Minsk return and rate of interest.

The European Union commission that issued the fine indicated that they would consider lowering the fine if Apple pays taxes to other tax authorities including, perhaps, the United States. Their basis for the case is preferential tax treatment that they claim the company received from Ireland.

Apple’s CEO Tim Cook responded with a letter indicating that the company would contest the ruling and that the move would steer businessss away from being headquartered in Europe. Cook mentioned the long history that Apple has in Ireland in the town of Cork and how this was not merely a recent tax inversion. Cook also restated the past comment that he made indicating That Apple supports global tax reform and that the issue remains a complex one citing that company’s tend to pay taxes where value is created, in their case which would primarily be the U.S. Where products are designed. Further, Cook indicated that there were no illegal tax benefits provided to the company from Ireland and that the company did not appeal for such preferential treatment from the country.

President Barack Obama indicated, in private, concerns that the U.S. Taxpayers who the U.S. Believes is eventually entitled to tax revenue for the income once repatriated, could receive the short end of the stick due to the EU ruling and promises to support American businesses like Apple in the case, which is sure to receive its share of attention as it works through an lengthy, contentious, and complicated appeal process.