On Tuesday, the European Commission (EC) issued a decision against the tax treaty between Ireland and Apple (NASDAQ: AAPL), claiming that they had violated the state aid rules of the block.
The European Commission has decided that the Irish government has given Apple's unjustified tax benefits and now, perhaps, it would have to pay up to 13 billion euro (14.5 billion dollars) fine.
Margrethe Vestager responsible for competition policy, stated that "the Commission investigation concluded that Ireland has provided illegal tax breaks for Apple's, allowing it to pay significantly less tax than other businesses over the years."
"The Ireland authorities made sure the reduction in the effective tax rate on earnings from Apple from 1% of the profit in Europe in 2003 to 0.005% in 2014", - she said.
The Commission concluded that the tax regime in Ireland allowed Apple to avoid taxation by almost all the profits obtained from the sales of products throughout the single market of the European Union.
The Commission explained that this is due to Apple's decision to receive all proceeds from the sales in Ireland from 2003 to 2014, and not in the countries where the products were directly launched.
In this light, the European Commission decided that Ireland should now compensate for the illegal aid, while others may require Apple's additional payments of income taxes for the period in accordance with its own tax rules.
"This would reduce the amount of compensation on the part of Ireland," - explained in the EC.
As expected, Ireland and Apple will appeal the decision.
Shares of Apple have collapsed by more than 2% in premarket trading.
In addition, Apple set the date of an annual event, which traditionally introduces new models of its gadgets, according to MarketWatch.
It is expected that on September 7 the company will introduce its new smartphone that can get the name iPhone 7, as well as updated versions of other products.
Apple sent invitations to journalists and published information about the event on the website under the heading "See you on the 7th”.