EU antitrust regulators ordered Apple on Tuesday to pay up to 13 billion euros ($14.5 billion) in taxes to the Irish government after ruling that a special scheme which Apple had devised to route their profits through Ireland was illegal in that it caused the Irish government to give unfair preference to Apple at the expense of other companies.
The massive sum, which is some 40 times bigger than the previous known demand by the European Commission to any company, could eventually be reduced if other countries sought additional tax payments from Apple, a senior EU executive said.
Apple had tried to use a complicated tax structure in Ireland and Luxembourg in order to reduce the amount of tax they pay in other countries. According to European Commission statements, Apple paid a paltry tax rate on European profits of between 0.005 and 1 percent.
The Obama administration has staunchly defended Apple, accusing the European Commission of leading a campaign against American corporate success and suggested that it would be overstepping its authority by issuing a formal tax order. They maintained that reforms in corporate taxation need to be agreed upon internationally before being implemented.
Apple, as well as the Irish government, have announced that they will appeal the decision.