European Commission Expected To Give Ruling About How Much Apple Owes Ireland In Back Taxes

On Tuesday the European Commission will give a ruling that will determine how much tech giant Apple owes the Irish government in back taxes from local tax agreements between 1991 and 2007 that violated Europe’s state aid rules and  could cost Apple a large amount of money.

The Irish Times reported that Apple could be asked to pay back hundreds of millions of dollars while JP Morgan said the figure could be as high as $19 billion (£15bn).

European Competition Commissioner Margrethe Vestager is expected to deliver a ruling early Tuesday.

At issue is the question about whether Apple’s past tax deals with Ireland, which permitted the tech company to pay little in taxes on earned income across Europe, constitutes as state aid.

According to EU officials, previous rulings by the Irish government from 1991-2007 allowed Apple to reduce its tax bill in Ireland during a period of time when the tech company created jobs in Irish cities like Cork.

EU law forbids national tax authorities to grant special tax benefits to selected companies or corporations operating in the country, which is considered to be illegal state aid.

Currently, Ireland has a 12.5 percent corporate tax rate which is much lower than the 38.90 percent corporate tax rate in the U.S.

During a August 25th interview with the Washington Post, Apple CEO Tim Cook denied that Apple received preferential treatment from the Irish government.

“It’s important for everyone to understand that the allegation made in the E.U. is that Ireland gave us a special deal. Ireland denies that. The structure we have was applicable to everybody, it wasn’t something that was done unique to Apple. It was their law” Cook said.

Cook explained that if Apple doesn’t get a fair hearing, they would seek an appeal.

Last year the European Commission ordered the Netherlands to recoup as much as €30 million ($33 million) from Starbucks in back taxes.

Amazon and McDonald’s are facing similar investigations from the European Commission this year in Luxembourg.

Written By:

John Schweitzer

@SchweitzFinance

Schweitz31@gmail.com

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