Apple chief executive Tim Cook has attempted to paint the company's decision to set up operations in Ireland as one that was driven by factors other than hard commercial reasons.
Reacting to the EU's announcement that Apple would have to cough up €13 billion ($A19.73 billion) in back taxes due to it having done sweetheart deals with Ireland, Cook held out a hint of a threat, saying that the EU decision would have a "profound and harmful effect" on investment and jobs in Europe".
The EU statement said that Apple had paid taxes ranging from 1% in 2003 to 0.005% by 2014 during its operations in Ireland which date back to 1983. Ireland's corporate tax rate is 12.5%, already among the lowest in comparable locations.
In a message addressed to "the Apple community in Europe", Cook said the EU statement issued overnight was wrong when it said that Ireland gave Apple a special deal on its taxes.
{loadposition sam08}"This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals. We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don't owe them any more than we've already paid," he wrote.
Graphic courtesy the European Commission.
The agreement Apple has with Ireland allows it to use the country as its global distributor. Countries like Australia have to buy products from the Irish subsidiary at artificially inflated prices and, as a result, the local outfit (the one in Australia) ends up making a very small profit and hence pays little or no tax in Australia.
Cook said he was confident that the EU ruling would be reversed on appeal. Both Ireland and Apple have said they will appeal.
He said that when it came to taxes for multinational companies a fundamental principle was that profits should be taxed in the country where the value is created.
"Apple, Ireland and the United States all agree on this principle. In Apple's case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States.
"European companies doing business in the US are taxed according to the same principle. But the Commission is now calling to retroactively change those rules."
Other big American technology companies like Google, Microsoft and Facebook are also under pressure over similar allegations of tax evasion.