Europe Just Gave Apple an Unprecedented Tax Bill

Apple got some bad news out of Europe on Tuesday in the form of a massive tax bill. The European Union says Ireland has given illegal tax benefits worth up to $14.5 billion to the company and must now recover the money, plus interest. The penalty is unprecedented—Reuters reports that it's 40 times bigger than any other such fine levied by the European Commission. "Member states cannot give tax benefits to selected companies—this is illegal under EU state aid rules," said EU Competition Commissioner Margrethe Vestager, per the AP.

She said a three-year investigation found Ireland granted such lavish tax breaks to Apple over many years that the company's effective corporate tax rate on its European profits dropped from 1% in 2003 to practically nothing—a mere 0.0005% in 2014. Both Apple and Ireland say they will appeal. CEO Tim Cook has previously called the tax inquiry "political crap," notes the Guardian, while Ireland says it threatens to torpedo its successful strategy of using low taxes to woo international business. "Apple follows the law and pays all of the taxes we owe wherever we operate," said the company in a statement, per the BBC. "We ... are confident the decision will be overturned." (More Apple stories.)