Gadgetory

Apple is in hot water with the European Union this morning after antitrust regulators hit the company with a 14.5 billion dollar tax penalty plus interest okay so let's break this down for us non tax accountants back in the day Apple set up shop in Ireland and over time reached agreements with the country to pay a lower tax rate than the 35% they'd pay here in the United States in exchange Apple would hire more workers there that happens a lot with companies here in the US who choose to store earnings in countries offering lower tax rates so it can keep more profits for itself the EU feels Ireland has been giving companies like Apple too big of a tax break and according to the Commission Apple has been paying a point zero zero five percent tax rate on all their profits across the EU because the company recorded all sales in Ireland and not in individual EU countries where the products were actually sold which is an effective tax rate of almost nothing especially compared to Ireland's already low 12.5 percent tax rate so now the EU Commission says Apple needs to pay up in back taxes they feel are appropriate of course Apple is appealing this ruling with Tim Cook firing off a scathing letter about the decision stating quote in every country where we operate Apple follows the law and we pay all the taxes we owe unquote he also claims this is an overreach by the European Union and an attempt to rewrite Irish tax laws obviously this is going to play out for a while because of the appeal but it will be interesting to see what the outcome is you can bet other major companies are keeping a very close eye on this case and if a precedent is set it's likely we'll see more rulings like this one in the future in other news how do I figure out how to pay point zero zero five percent in taxes I think that would come out to I don't know like a dollar fifty listen I didn't get into hosting to do math which is probably why I pay such high taxes that's it for this tech news update I'm Ashley sceva and you can stay on top of the biggest stories at cnet-dot-com-slash-loaded