EU hits Apple with $14.6 billion tax bill

Tech giants hold $500 billion in cash
Ireland must recover up to 13 billion euros ($14.6 billion) in unpaid taxes from Apple, Europe's top regulator ruled on Tuesday.

The tax ruling is by far the biggest the European Union has ever made regarding a single company, and it could spark a huge transatlantic row over how Europe treats big U.S. companies.

Apple shares fell almost 3% in premarket trading.

The company will appeal the decision. It said the ruling upended the international tax system and would damage jobs and investment in Europe.

The European Commission, the EU's de-facto government, said the Irish government had granted illegal state aid to Apple (AAPL, Tech30 ) by helping the tech giant to artificially lower its tax bill for more than 20 years.

Apple reacts to the EU commission hitting it with a 14.5 billion tax bill
"Member States cannot give tax benefits to selected companies -- this is illegal under EU state aid rules," said Commissioner Margrethe Vestager, Europe's top antitrust official.

Apple paid tax at 1%, or less, on profits attributed to its subsidiaries in Ireland, well below the 35% top rate in the United States and even well below Ireland's 12.5% rate.

That prompted complaints by both European and U.S. lawmakers, who argued the deal gave Apple an unfair advantage in exchange for creating jobs in Ireland.

CEO Tim Cook was even called to testify on Apple's tax deal before a Senate committee in 2013.

The bill for tax benefits, plus interest, covers 2003 to 2014. Apple has more than $231 billion in cash on its balance sheet to cushion the blow.