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Landmark Apple tax ruling could have far-reaching implications

The European Commission's ruling that the giant Apple corporation must pay the Republic €13 billion in back tax is a decision with profound implications and sets the EC on a collision course with a powerful multinational and an EU member state.

Apple has been a major asset to the Republic since it opened a factory in Cork in October 1980 with just 60 employees. Over the decades the company's fortunes have soared and it is now a global business superpower.

Successive Irish governments have been able to attract investment from major names thanks to its low rate of corporation tax.

However, in a landmark ruling, the EU is insisting that Apple was not paying the 12.5 per cent business rate but as little as 0.005 per cent tax in 2014.

According to Europe's competition commissioner Margrethe Vestager, Apple was paying just €50 in tax on every €1 million of profit.

Apple has issued a robust response insisting that it pays all the taxes it owes and the allegation that Ireland gave the company a special deal ``has no basis in fact or in law.''

The Irish government has said it `profoundly disagrees' with the verdict with finance minister Michael Noonan vowing to appeal and criticising what he sees as an attempt by the commission to influence tax policy in an EU country.

There is no doubt the sum involved is huge - equivalent to the Republic's annual health budget - but with both Apple and the Irish government fighting the decision it would be unwise to bank on the economy receiving a windfall any time in the near future.

But the Irish government must show that major international firms are paying all taxes owed and there are no `sweetheart deals'.

And while the focus now is on Apple and its arrangements in Ireland, yesterday's decision could have far-reaching ramifications for other EU countries doing business with US multinationals.

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