Apple could owe $8 billion for its overseas cash pile

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Nothing like that post-Christmas bill, eh?
Photo: Universal Pictures

Apple could find itself on the receiving end of a hefty $8 billion bill for back taxes as a result of the current European Commission investigation into its tax policies, according to a new report from Bloomberg Intelligence.

If the Commission decides to enforce a tougher accounting standard on Apple, the company may owe taxes at a 12.5 percent rate on the roughly $64.1 billion in profit it generated from 2004 to 2012.

This is one tax bill you don't want to get.
This is one tax bill you don’t want to get.
Photo: Bloomberg Intelligence

Despite initially having been promised for a Christmas deadline, the last we heard is that Apple and Ireland will have to wait until February to find out whether it broke international tax rules by sheltering profits worth tens of billions of dollars in Ireland.

Apple is one of several multinational companies having their European tax affairs examined by E.U. antitrust regulators. Tim Cook has denied any wrongdoing on Apple’s part. During the recent “Inside Apple” episode of 60 Minutes, Apple’s CEO labelled accusations of tax evasion on Apple’s part as, “total political crap” and said that the company, “pays every tax dollar we owe.”

Recently Apple agreed to pay €318 million ($347 million) to settle a tax investigation in Italy. While that sums still pretty sizeable, it’s nothing compared to the $8 billion it could conceivably owe if this goes ahead.

Source: Bloomberg

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  • SBacklin

    I will grant that I don’t understand all the nuances of this but, I’m guessing that Apple does pay the taxes it owes. However, it also takes advantage of favorable tax situations by moving profits into countries that give it sweetheart deals to avoid even more heft tax bills. Legally, there may be nothing wrong but, I think a lot of people have issues with the moral side of it. Some people may call it loopholes. Others simply call it skirting the law. I find it morally dubious where Apple goes out of its way to find such ways to shelter its profits. I won’t chastise Apple for it but, I’d say let governments close the supposed loopholes.

  • MWinNYC

    Love my Apple products, but they are the GREEDIEST company on earth and there is no denying it! I’m sure they find all the loopholes they can to avoid paying taxes.

  • How about articles that focus on the ridiculous taxes that businesses are being forced to pay? Nobody wants to pay taxes, so yeah, we will all find ways to avoid it whenever possible. I don’t fault Apple or anybody else for it.

    Back when taxes were extremely low and were spent WISELY by governments, it would be one thing… but these days, there are so many different taxes, and the money is wasted by special interests and pandering that it’s everybody’s duty to avoid paying them whenever possible.

  • Hayden Evans

    Meanwhile, Goldman Sachs is currently settling with the US Department of Justice for it’s role in the 2008 financial crisis for only $5B.

  • John Youle

    I think there must be a better way than trying to chase after avoided taxes. Surely if there were a way to impose a world wide taxation system, that every dollar spent is taxed as a GST/ VAT. Then each country would benefit where the money is spent. No loop holes no dodging/ if a company spends $1 anywhere then it pays a levy.