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APPLE HAS ADMITTED it could be hit with a back-taxes bill for its Irish operations if European authorities decide the US tech giant got a sweetheart deal from local officials.
And the world’s most valuable public company has acknowledged how heavily its bottom line depends on paying low taxes in the Republic, where several of the company’s offshoots are set up.
In an annual filing for US regulators, Apple warned that if the European Commission decided its tax affairs in Ireland amounted to illegal state aid it could be forced to repay some of the money it effectively got in subsidies.
While it didn’t put a figure on the unpaid taxes it could be slugged with, the sum has been estimated at about €160 million.
The commission has claimed Apple got preferential tax treatment in Ireland for nearly 20 years via to two locally-registered subsidiaries, Apple Sales International (ASI) and Apple Operations Europe.
How much money are we talking about?
While ASI told US authorities its 2012 sales revenue was $63.9 billion (€50.9 billion in today’s money), Ireland agreed to fix its taxable income – the amount it attributed to its local operations – at between €50-€60 million that year. That’s about 0.1% of the total revenue figure.
In a nutshell, Apple is accused of passing billions in sales revenue through the offshoot while apparently paying a pittance in tax.
Irish authorities didn’t identify what country either company was officially resident in for tax purposes, the commission said.
In its latest filing, Apple said if the commission made a final decision against it then that could mean “changes to existing tax rulings that, in turn, could increase the company’s taxes in the future”.
The European Commission could also require Ireland to recover from the company past taxes reflective of the disallowed state aid,” it said.
Apple added that if the amount it had to pay in future taxes went up - particularly in the US and Ireland – or if its tax bills for previous years were increased then its “operating results, cash flows and financial condition could be adversely affected”.
Both Apple and the Irish government have denied striking any preferential tax deals.
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They should at least pay the 12.5% C.T. like all companies.
Mike they pay 12.5% on profits from Irish buisness
The have over 100 billion in cash in offshore banks. I’m sure they’ll be fine :)
Good, an extra billion in the coffers, that should cover the water costs for 2 years
You think that money would be paid to the Irish revenue? I severely doubt that
Was thinking the same, it will probably get swallowed up by the e.u.
“The European Commission could also require Ireland to recover from the company past taxes reflective of the disallowed state aid,” it said.”
I heard recently that it depends on the language. Apple may be required to *repay* the money, in which case the Irish state gets it but if the EU *fines* Apple for the total amount of back-taxes, the commission keep the money. I can’t imagine for a minute the punishment won’t come in the form of a fine. The EU won’t miss that chance so watch out for the lingo.
Tax deals for multi-billion dollar companies while the tax-payer is forced to the streets to protest water charges. This government needs to fall
@thejynxeffect
Your posting is rather confusing. Perhaps you could advise as to how a tax arrangement made many years ago now requires a change of Government !
What a strange form of logic or perhaps………..
@ Hugh Cavanagh
It seems you’re easily confused. I was simply pointing out that this government will chase down taxpayers to pay for water but will allow big MNC’s get away with paying feck all corporation tax. I think they’re paying something like 2.2%. I know its a very tough logic to understand. I’ll try and break it down for you
One rule for me and you and another rule for MNC’s who rule our government and this country. I have some complex equations to prove my crazy theory if you’d like me to send them on..
You are suggesting the current government gave these tax breaks. They obviously didn’t. It still hasn’t been deemed incorrect.
To then complain that the enforce the laws on individuals is ridiculous.
Fine if you disagree with water charges but enforcement of law is not wrong. Do you just expect them to do nothing?
I expect red thumbs as people can’t see past something they don’t want to pay.
No, I’m saying the current government continues to give preferential tax deals to big MNC’s. Who initially gave the tax deal for Apple is irrelevant. The Apple tax deal is just scratching the surface as far as I’m concerned.
No I don’t want to pay for water again because I already do. Do you want to pay for it again?
Apple, don’t worry Edna and the lads will keep your cooked tax books a secret over at the ifsc. But in future if you don’t want to pay your 12.5 then we could arrange that these records be sent to Washington wherein you will see a very angry group of law enforcers break down your doors and lock you in cages for a considerable length of time. Ireland houses the dirtiest tax records in the western economy we could yield so much power with this information,
You think? You should look up the tax deals done in the city of London since the 80s.
@mike not to mention The REAL corporation tax rate in France.
Good man, deep. Knowing where the bodies are buried is always useful. Oh, before all the anti shinner freaks get their spoke in, by ‘bodies ‘ I mean evidence of criminality.
Ireland has come out of this looking like Cowboys..Were as 1 billion in back tax pay to Apple is no big shakes to them
Oh dear, how sad, never mind :$ if these leeches have to pay a small portion of what they actually owe I won’t lose any sleep over it. Shame on successive governments for allowing this to happen – and I don’t want to hear about the jobs, each one of them cost millions in taxes foregone.
But they wouldn’t be hear without the tax break so we haven’t lost a penny??
Bollocks
I bow to the considered and articulate case you make…
It could go towards financing a water utility company…
Well done our politicians. Yet again we come out looking like cowboys. What companies are going to want to invest here now with all the bad publicity and raised eyebrows, they thought they were being clever but end up looking like common tax havens. And as endas friend bono said it’s only because of these tax deals that we’ve done well.
This isn’t going to do our international reputation any good..
Like it can get any worse? News today something else tomorrow. Im sure Ireland will be ok.
What reputation would that be?
Rory, I would guess it’s our reputation as genuflecting lickspittles, who will stand for any illegality from anybody who will promise 30 jobs.
From what Ive been told, apple are one of many companies offered such deal. Ireland likes multinationals coming here, setting up, creating jobs and because they create jobs we should tax them a small amount or they’ll leave. Tax thr citizens but the huge money bag corporations.
No that is a very simplistic incorrect view.
The government gave tax breaks then the companies misused them via loop holes. Effectively doubling tax breaks.
Most countries offer tax deals to attract companies.
Unless tax rules are harmonised world wide you will have this issue. It won’t happen in your grand childrens’ life time
The should have tied patent revenue to r&d tax breaks to insure return in the future.
yeah but Ireland is unique.
Haha
I’ll make a simple comment. Every last cent of back tax from this or similar situations MUST be added to the health budget and no excuses accepted!
Who runs this country ? And it’s not any of you.
According to http://SeoGenesis.ie billion dollar companies like Apple will always find a way to pay damn all tax.
This supine government will continue to try and lick Apple’s ass, and avoid collecting the tax-wait and see.!
The prefer to raid poor family ‘s piggy banks for water taxes.!
According to http://SeoGenesis.ie these companies like Apple will always find tax loopholes.
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