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EU orders Apple to pay up to €13bn in Irish taxes - business live | |
(35 minutes later) | |
11.38am BST | |
11:38 | |
Noonan: Ireland will appeal EU ruling on Apple | |
Ireland does not want the money from US tech giant Apple. | |
Michael Noonan, Ireland’s finance minister, says the government will appeal the EU ruling, adding that he disagrees “profoundly” with the decision in Brussels: | |
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. | |
Updated | |
at 11.39am BST | |
11.32am BST | |
11:32 | |
To put Apple’s Irish unpaid tax bill in context, the Guardian’s Henry McDonald in Dublin says €13bn is the equivalent of one year’s spending in the Irish health service budget... | |
11.29am BST | |
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This is real change, and it is change for the better. | |
- EU commissioner Margrethe Vestager on the Apple tax ruling. | |
The commission found fault with two tax rulings issued by Ireland to Apple that have “substantially and artificially lowered the tax paid by Apple in Ireland since 1991”. | |
It says almost all profits recorded by two Irish incorporated companies of the Apple group were attributed to a “head office”. However, the commission found these head offices existed only on paper, and could not have generated such profits. | |
These profits allocated to the “head offices” were not subject to tax in any country under specific provisions of the Irish tax law, which are no longer in force. | |
As a result of the allocation method endorsed in the tax rulings, Apple only paid an effective corporate tax rate that declined from 1% in 2003 to 0.005% in 2014 on the profits of Apple Sales International. | |
11.21am BST | |
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The European Commission’s investigation into Apple’s tax affairs began in June 2014. | |
It concluded on Tuesday that Ireland has been giving the US tech giant illegal state aid since 1991, adding: | |
The commission can order recovery of illegal state aid for a 10-year period preceding the commission’s first request for information in 2013. Ireland must now recover the unpaid taxes in Ireland from Apple for the years 2003 to 2014 of up to €13 billion, plus interest. | |
The tax treatment in Ireland enabled Apple to avoid taxation on almost all profits generated by sales of Apple products in the entire EU Single Market. This is due to Apple’s decision to record all sales in Ireland rather than in the countries where the products were sold. | |
This structure is however outside the remit of EU state aid control. If other countries were to require Apple to pay more tax on profits of the two companies over the same period under their national taxation rules, this would reduce the amount to be recovered by Ireland. | |
UPDATE: Apple shares down 1.6 percent in premarket trade after EU orders Apple to pay 13 billion euros in tax. | |
11.11am BST | |
11:11 | |
A few facts about Apple in Ireland from the Guardian’s Henry McDonald: | |
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Commissioner Margrethe Vestager, in charge of competition policy, says the EU is sending a clear message that illegal state aid will not be tolerated. | |
Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules. 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. | |
In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014. | |
11.01am BST | 11.01am BST |
11:01 | 11:01 |
It is now up to Ireland to recover the tax from Apple. | It is now up to Ireland to recover the tax from Apple. |
The Commission says: | The Commission says: |
The European Commission has concluded that Ireland granted undue tax benefits of up to €13 billion to Apple. | The European Commission has concluded that Ireland granted undue tax benefits of up to €13 billion to Apple. |
This is illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. Ireland must now recover the illegal aid. | This is illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. Ireland must now recover the illegal aid. |
10.56am BST | 10.56am BST |
10:56 | 10:56 |
The full statement on Apple’s Irish tax bill can be found here. | The full statement on Apple’s Irish tax bill can be found here. |
10.52am BST | 10.52am BST |
10:52 | 10:52 |
Breaking: EU rules Apple must pay up to €13bn in Irish taxes | Breaking: EU rules Apple must pay up to €13bn in Irish taxes |
Ireland must recover up to €13bn in taxes from Apple according to an EU ruling. | Ireland must recover up to €13bn in taxes from Apple according to an EU ruling. |
EU regulators say Apple’s unpaid Irish tax bill could be cut if other countries including the US order the company to pay more. | EU regulators say Apple’s unpaid Irish tax bill could be cut if other countries including the US order the company to pay more. |
10.38am BST | 10.38am BST |
10:38 | 10:38 |
The pound is down 0.2% against the dollar this morning at $1.3083. | The pound is down 0.2% against the dollar this morning at $1.3083. |
It is roughly flat against the euro at €1.1710. | It is roughly flat against the euro at €1.1710. |
10.35am BST | 10.35am BST |
10:35 | 10:35 |
Eurozone confidence falls more than expected post Brexit vote | Eurozone confidence falls more than expected post Brexit vote |
Confidence in eurozone countries edged lower in August, suggesting the Brexit vote has started to take its toll in the single currency bloc. | Confidence in eurozone countries edged lower in August, suggesting the Brexit vote has started to take its toll in the single currency bloc. |
The European Commission’s economic sentiment indicator fell to 103.5 in August from 104.5 in July. It was weaker than the 104.1 forecast by economists. | The European Commission’s economic sentiment indicator fell to 103.5 in August from 104.5 in July. It was weaker than the 104.1 forecast by economists. |
The business climate indicator fell to a near three-year low of 0.02 this month from 0.38 in July. | The business climate indicator fell to a near three-year low of 0.02 this month from 0.38 in July. |
Jack Allen, European economist at Capital Economics, says the indicators signal a slowdown in the eurozone: | Jack Allen, European economist at Capital Economics, says the indicators signal a slowdown in the eurozone: |
August’s fall in the eurozone economic sentiment indicator supports our long-held view that growth in the currency union will slow in the second half of this year. | August’s fall in the eurozone economic sentiment indicator supports our long-held view that growth in the currency union will slow in the second half of this year. |
The sectoral breakdown confirmed the fall in consumer confidence and revealed declines in the services, retail and industrial indices. | The sectoral breakdown confirmed the fall in consumer confidence and revealed declines in the services, retail and industrial indices. |
Meanwhile, among the euro-zone’s four largest economies, France was the only country in which the ESI rose. Italy’s index fell to an 18-month low, probably reflecting political uncertainty and concerns about the country’s banks. | Meanwhile, among the euro-zone’s four largest economies, France was the only country in which the ESI rose. Italy’s index fell to an 18-month low, probably reflecting political uncertainty and concerns about the country’s banks. |
But the general weakness of ESIs across the euro-zone suggests that more fundamental forces are weighing on growth, such as the fading boost from previous declines in oil prices and the euro exchange rate. | But the general weakness of ESIs across the euro-zone suggests that more fundamental forces are weighing on growth, such as the fading boost from previous declines in oil prices and the euro exchange rate. |
Allen says the data suggests quarterly eurozone growth of just 0.1% to 0.2%, from 0.3% in the second quarter. | Allen says the data suggests quarterly eurozone growth of just 0.1% to 0.2%, from 0.3% in the second quarter. |
10.16am BST | 10.16am BST |
10:16 | 10:16 |
The European Commission is expected to deliver its verdict on Apple’s back-dated Irish tax bill at 11am UK time. | The European Commission is expected to deliver its verdict on Apple’s back-dated Irish tax bill at 11am UK time. |
The press conference should be live streamed here. | The press conference should be live streamed here. |
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10:08 | 10:08 |
Howard Archer at IHS Markit says the weaker-than-expected mortgage data reinforces his expectation that house prices will drop by about 3% towards the end of this year, and by 5% in 2017. | Howard Archer at IHS Markit says the weaker-than-expected mortgage data reinforces his expectation that house prices will drop by about 3% towards the end of this year, and by 5% in 2017. |
We believe housing market activity is likely to be limited over the coming months and prices will weaken as heightened uncertainty following the UK’s vote to leave the EU weighs down on consumer confidence and willingness to engage in major transactions, and also hampers economic activity. | We believe housing market activity is likely to be limited over the coming months and prices will weaken as heightened uncertainty following the UK’s vote to leave the EU weighs down on consumer confidence and willingness to engage in major transactions, and also hampers economic activity. |
The fundamentals for house buyers look likely to soften over the coming months with unemployment rising and purchasing power softening. | The fundamentals for house buyers look likely to soften over the coming months with unemployment rising and purchasing power softening. |
10.02am BST | 10.02am BST |
10:02 | 10:02 |
Scott Bowman, UK economist at Capital Economics, says the drop in mortgage approvals is likely to accelerate in the post Brexit vote environment. | Scott Bowman, UK economist at Capital Economics, says the drop in mortgage approvals is likely to accelerate in the post Brexit vote environment. |
July’s UK money and credit figures provided more evidence that the housing market is cooling down. With Brexit uncertainty having driven new buyer enquiries lower in recent months, we suspect that mortgage approvals have further to fall over the rest of the year. | July’s UK money and credit figures provided more evidence that the housing market is cooling down. With Brexit uncertainty having driven new buyer enquiries lower in recent months, we suspect that mortgage approvals have further to fall over the rest of the year. |
There were some initial signs that the Brexit vote has effected consumers too. Indeed, net consumer credit only rose by a monthly £1.2bn, well below the consensus expectation for a £1.7bn increase. | There were some initial signs that the Brexit vote has effected consumers too. Indeed, net consumer credit only rose by a monthly £1.2bn, well below the consensus expectation for a £1.7bn increase. |