EU will order Ireland to collect over $1B in back taxes from Apple - report
On Tuesday the European Commission will find against Ireland's tax arrangements with Apple, and ask the country to collect over 1 billion euros ($1.119 billion) in back taxes, a report claimed on Monday.
In fact the Commission will simply make a recommendation on the total it expects to be collected, leaving the Irish government to calculate the exact amount, one of two sources elaborated to CNBC. Some analyst estimates previously suggested that Apple could owe upwards of $8 billion.
The E.U. has been probing Apple's Irish tax arrangements since 2013, suggesting that the government extended preferential treatment -- and hence illegal state aid, under E.U. rules -- in order to attract the company's jobs and money. Exploiting various loopholes, the company managed to lower its tax rate on billions in international revenue to just 2 percent, far removed from the 12.5 percent it would usually owe.
Both Apple and the Irish government have denied any wrongdoing and promised to fight any unfavorable ruling, but precendent is not on their side. The Commission has already issued similar findings against the Netherlands and Luxembourg, for their respective tax deals with Starbucks and Fiat Chrysler.
The potential size of the Irish ruling has led Apple CEO Tim Cook and even U.S. Treasury Secretary Jack Lew to put pressure on the Commission. Last week, for instance, a white paper ordered by Lew claimed that the E.U.'s competition directorate is turning into a "supranational tax authority," and undermining "tax certainty."
In fact the Commission will simply make a recommendation on the total it expects to be collected, leaving the Irish government to calculate the exact amount, one of two sources elaborated to CNBC. Some analyst estimates previously suggested that Apple could owe upwards of $8 billion.
The E.U. has been probing Apple's Irish tax arrangements since 2013, suggesting that the government extended preferential treatment -- and hence illegal state aid, under E.U. rules -- in order to attract the company's jobs and money. Exploiting various loopholes, the company managed to lower its tax rate on billions in international revenue to just 2 percent, far removed from the 12.5 percent it would usually owe.
Both Apple and the Irish government have denied any wrongdoing and promised to fight any unfavorable ruling, but precendent is not on their side. The Commission has already issued similar findings against the Netherlands and Luxembourg, for their respective tax deals with Starbucks and Fiat Chrysler.
The potential size of the Irish ruling has led Apple CEO Tim Cook and even U.S. Treasury Secretary Jack Lew to put pressure on the Commission. Last week, for instance, a white paper ordered by Lew claimed that the E.U.'s competition directorate is turning into a "supranational tax authority," and undermining "tax certainty."
Comments
Apple should take its business elsewhere, there are plenty of other places to choose!
Perhaps this is yet another good reason (that of national sovereignty) to leave the EU! If this realstionship and deal is good enough for Ireland the Apple then that should be the end of the matter. The EU does not provide Ireland with 6,000 jobs like Apple does, so if I were Ireland I'd simply refuse to abide by their decision! What the hell can they do? Expel Ireland from the EU? That would be a blessing and a death warrant to the lazy bureaucrats in the EU in Brussels.
In that case, Apple should raise the price of all products offered in the EU zone, to compensate for the illegal tax rape and to offset any loss of profits and income, because of the mob shake down.
Any country that is a part of the EU are basically slaves to the disgusting elite, and they should do what they're told, or else.
The good news is that the EU has already begun to crumble. I don't give it that many more years, before they're dead 100%. That is so wonderful and long overdue.
It is in Apple's best interest that the EU dies a quick death.
If the EU expelled Ireland, Apple and all the other US companies located here would then be outside the EU. Brilliant strategy you have there.
No. Rules they claim were broken. HUGE difference.
They probably will raise prices in the EU, if this were to come to pass. However, it's a long ways away, and affects many US companies (Amazon, Google, Starbucks, etc.) not just Apple.
The law was clear, Ireland and Apple violated, and now they have to backpay. It's really that simple. They got off lightly; the system is rigged in these cases so that the punishment is always less than the crime, Ireland and Apple's effective tax rate is still appallingly low.
The EU is sticking around, no matter how many crazy alt-right yanks claim otherwise, and for the most part its laws are good ones.
Good outcome. The amount seems a little low, but I haven't done the math and I have no inclination to do so, so I'll trust it.
Who will suffer more?
We don't need the EU.
Let's see if the suits in Brussels are ready to play hardball. We sure are! Bring it on! We'll crush them all, like the little men that they are.