Apple may have to pay Ireland 10 years of back taxes
Apple may have to pay Ireland 10 years of back taxes
CNNMoney (New York)
April 30, 2015: 7:41 AM ET
By David Goldman
Apple says it could be forced to pay a decade's worth
back taxes to Ireland.
In June, the European Commission launched a probe to see
whether Apple's 1991 tax deal with Ireland violated European Union laws
prohibiting state aid to companies. Ireland and Apple say they work in
accordance with the law.
But the handwriting on the wall suggests that the EC
could rule against Ireland. Apple warned in October that it might lose its
Irish tax break.
This week, in a regulatory filing, Apple said that if the
EC comes back with an unfavorable ruling, the company could have to pay back
the Irish government the disallowed state aid it received, covering a period of
up to 10 years.
Apple said the amount could be "material," but
it couldn't yet estimate exactly how much it would have to pay.
Even if the EC rules against Ireland, Apple probably
wouldn't have to pay back taxes any time soon. The Irish government would
almost certainly appeal the case, and it would likely be stuck in courts for
years.
Apple has paid as little as 2% on profits attributed to
its subsidiaries in Ireland, well below the 35% top rate in the United States
and even well below Ireland's 12.5% rate. That has prompted complaints by both
European and U.S. lawmakers. CEO Tim Cook was even called to testify on Apple's
tax deal before a Senate committee in 2013.
To soothe angry regulators, Ireland announced last year
that it would end a key tax loophole for tech companies by 2020.
But some experts say the change is more of a public
relations move than a step that will significantly increase the taxes those
companies have to pay.
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