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  • Apple Claims EU Investigation Over Irish Tax Arrangements Could Cause a Big Loss

    Apple has reportedly started preparing investors for the possibility that the European Commissionís ongoing investigation into Irelandís corporate tax arrangements could force the company to suffer a significant financial loss. Apple ended up writing the following in its latest quarterly report regarding the matter:

    If the European Commission were to conclude against Ireland, it could require Ireland to recover from the company past taxes covering a period of up to 10 years reflective of the disallowed state aid, and such amount could be material.
    For those of you who didnít know, the investigation all came from accusations that Ireland along with Luxembourg and the Netherlands, offered relaxed tax arrangements to large companies in exchange for setting up operations there. The preliminary report on the topic was issued by the commission last year and found that Irelandís 1991 and 2007 tax records with Apple represented illegal state aid, which was purposely designed to help skirt market forces.

    Based on financial data, Apple reportedly ended up saving as much as $9 billion per year as a result of the agreements. This means that any penalty which includes a retroactive tax recovery could end up amounting to tens of billions of dollars that Apple would have to pay back. For their own part, Ireland vowed to fight any EU ruling against the tax policies it employed and the Cupertino California company has repeatedly defended its arrangement. Apple mentioned the following in a previous statement issued last year regarding the matter:

    Apple is proud of its long history in Ireland and the 4,000 people we employ in Cork. They serve our customers through manufacturing, tech support and other important functions. Our success in Europe and around the world is the result of hard work and innovation by our employees, not any special arrangements with the government. Apple has received no selective treatment from Irish officials over the years. We're subject to the same tax laws as the countless other companies who do business in Ireland.
    Weíll have to wait and see how the issue unfolds as it is likely to be a long and slow process.

    Source: The Financial Times
    This article was originally published in forum thread: Apple Claims EU Investigation Over Irish Tax Arrangements Could Cause a Big Loss started by Akshay Masand View original post
    Comments 3 Comments
    1. Ambi_Valence's Avatar
      Ambi_Valence -
      Rich people and rich companies are often no different. What separates them from Joe Public is that they can afford the lawyers, accountants and politicians to be able to horde money.
      I love Apple products but not the way the company behave. If they are found guilty I hope they get kicked in the butt so hard that they need surgery to remove the shoe.
    1. SpiderManAPV's Avatar
      SpiderManAPV -
      Not trying to defend apple at all, just curious about the legality of this. How is it legal to collect taxes so far back? Wasnít Apple technically following a legal loophole at the time and itís only recently been changed? If so, it seems like you couldnít punish a company for actions it did back when it was legal to do those actions.
    1. quidam_brujah's Avatar
      quidam_brujah -
      According to USATODAY.com, Apple "ended the first calendar quarter with $33 billion in cash and short-term investments and $160.4 billion in long-term investments." According Financial Times, it could be a $3 billion fine (5% of profits over 3 years). Even if they go back 10 years, that's ~$10 billion. Apple could sneeze that into a hanky and mail it to them.

      Looking at the bigger picture (because it's not only Apple), this 'multinational corporation' 'problem' could be solved by eliminating deferrals and taxing income, where it happens, when it happens.