The European Commission has concluded that Ireland granted undue tax benefits of up to €13bn to Apple. This allowed Apple to pay an effective corporate tax rate of 1% on its European profits in 2003 falling to 0.005% in 2014, according to Margrethe Vestager, EU commissioner for competition policy.

Two tax rulings in 1991 and 2007 endorsed a way to establish the taxable profits for two Irish incorporated companies of the Apple group (Apple Sales International and Apple Operations Europe), which did not correspond to economic reality. Almost all sales profits recorded by the two companies were internally attributed to a ‘head office’. But these head offices existed only on paper and profits allocated to them were not subject to tax in any country under specific provisions of the Irish tax law, which are no longer in force.

The commission said this selective tax treatment of Apple in Ireland is illegal under …