Eight-billion-dollar Irish tax bill looms over Apple
Oh Timmy boy… the tax, the tax is calling…
An upcoming European Commission ruling on tax laws could result in Apple having to pay as much as $8bn (€7.33bn, £5.6bn) in back taxes.
This according to Matt Larsen, an analyst at Bloomberg Intelligence who expects the Cupertino maker of iStuffs will be found to have incorrectly reported its financial figures in Ireland and, as a result, could encounter a hefty bill for back taxes.
Larsen reckons a probe launched in 2014 is likely to wrap up and bring a decision as soon as March, and, if Apple is found to have under-reported its numbers, authorities in Ireland could seek to collect.
This after the Commission issued a ruling in a similar tax case involving Starbucks and Fiat. The decision, which calls for 35 companies to pay out at least €700m (£536m, $765m) in back taxes makes the "excess profits" tax scheme illegal, and could pave the way for EU countries to collect back taxes against companies who have been using the tax scheme to skip out on paying.
"Belgium has given a select number of multinationals substantial tax advantages that break EU state aid rules," Commissioner Margrethe Vestager said of the ruling.
"It distorts competition on the merits by putting smaller competitors who are not multinational on an unequal footing."
With Apple's probe being of a similar nature to the Starbucks and Fiat case, it is likely the upcoming decision will lead to the consumer electronics giant owing back taxes of its own. Bloomberg reports that Apple plans to appeal any ruling not in its favor.
While $8bn would be a substantial hit for any company, Apple would be better positioned than most to absorb the blow. Tim Cook and his underlings sit on a reported pile of more than $200bn cash on hand, and eager fanbois fill the company's coffers to the tune of about $11bn every three months. ®
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