Apple to be investigated by EU for alleged tax evasion

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Apple paid just 3.7% tax on its non-U.S. income last year — and the European Commission isn’t happy about it.

Registering its overseas business in Ireland, Apple is one of three companies being investigated for abusive transfer pricing and other forms of corporate profit shifting, with the other two being Starbucks and Fiat Finance and Trade.

The subject of corporate tax avoidance has become an increasingly hot-button issue in recent years, as the result of probes into international businesses like Apple and Google, which use convoluted structures as a means of slashing their tax bills.

Irish Prime Minister Enda Kenny told journalists that “We believe that our legislation … is very strong and ethically implemented and we will defend that very robustly.”

A U.S. Senate subcommittee investigation revealed last year that Apple has escaped paying billions from its tax bill. Senator Carl Levin, chairman of the subcommittee, said the Apple structure represents “the Holy Grail of tax avoidance.” Apple was later cleared of wrongdoing by the Securities and Exchange Commission.

“We pay all the taxes we owe — every single dollar,” testified Tim Cook during the investigation.

We’ll keep you updated as this story progresses.

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About the author

Luke DormehlLuke Dormehl is a UK-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Formula: How Algorithms Solve All Our Problems, And Create More and The Apple Revolution, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme, and other publications. He'd like you a lot if you followed him on Twitter.

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