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Business

EU hits Apple with €13bln tax bill

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Opening sequence

Business

EU hits Apple with €13bln tax bill

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COMING UP:EU hits Apple with €13bln tax bill

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Transcript

00:00:00
>> Apple just got a 13 billion Euro tax demand from Brussels. EU investigators ruling that the tech giant broke the law by routing its European profits through Ireland. The European Commission says that that amounted to illegal state aid. Reuters Tom Burke in London.>> Ireland's been a very attractive place for particularly US multinationals, as it has allowed companies like Google and Apple and others to operate with incredibly low tax rates around Europe.
00:00:30
The Irish government has been very clear about that, that's a policy. This ruling will certainly put a chill through those kinds of companies. It may mean that countries like Ireland, and others like Luxembourg and the Netherlands, who also have low tax strategies, may find it harder to attract investment.
00:00:45
That's the message coming from Apple. It's the message also coming from the US Treasury at the moment. Of course, tax campaigners say that's typical saber rattling, and that these companies are in Europe because this is where the customers are.>> Last year, Apple's earnings of $18 billion were the biggest ever reported by a corporation.
00:01:04
The bill it's facing now dwarfs previous EU tax fines. Starbucks and Fiat Chrysler asked for just 30 million euros each in similar cases.>> It's an incredible sum, and there's huge uncertainty about whether any money will actually be paid. This is uncharted territory for the EU, and for the companies, and for the governments involved in these tax rulings.
00:01:27
We just don't know whether the legal basis of the European Commission's argument will hold up in court. Last week, the U.S. Treasury published a long document which challenged the legality under EU legal law of these claims. So it's highly uncertain and we'll really have to wait some years to find out.
00:01:47
>> Both Ireland and Apple say they'll fight the ruling. That battle will go to Europe's highest court in Luxembourg and could take years to sort out.