The European Commission has ordered Apple to pay a record 13 billion Euro (US$ 14.5 billion) plus interest, averring that Ireland had illegally slashed the iPhone maker’s tax bill, in a crackdown on fiscal loopholes that also risks inflaming tensions with the US Treasury. The world’s richest company benefited from selective tax treatment that gave it an unfair advantage over other businesses, said the European Union regulator on 30th August, 2016. This is the largest tax penalty imposed by the EU in a three year campaign against corporate tax avoidance. Apple and Ireland have both vowed to fight the decision in the EU courts. EU Competition Commissioner Margrethe Vestager asserts that Ireland allowed Apple to pay an effective corporate tax rate of 1% on its European profits in 2003 and down to 0.005% in 2014. “If my effective tax rate would be 0.05% falling to 0.005% – I would have felt that maybe I should have a second look at my tax bill,” she told reporters. The US Treasury department, which has pushed back hard against the EU state-aid probes, said the commission’s actions “could threaten to undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the US and the EU.“ Apple, which employs about 6,000 people in Ireland, was one of the first companies caught up in the EU’s backlash against corporate tax-avoidance. “I disagree profoundly with the commission’s decision,” said Irish Finance Minister Michael Noonan. Ireland’s tax system is founded on the strict application of the law “without exception,” he said.