EU tax probe could fine Apple 10% of earnings since 2003

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Preliminary findings by the European Commission have slammed Apple and Ireland for a so-called “sweetheart” tax deal which allowed Apple to avoid paying taxes by building up a massive offshore cash pile of $137.7bn in the country.

The deal dates back to 1991, and allowed Ireland to provide Apple with illegal state aid. Apple has had a base in the country since 1980.

In a statement, the European Commission said that “the Irish authorities confer an advantage on Apple,” and that this “advantage is obtained every year and ongoing.”

EU plans to publish details of Apple’s alleged tax evasion

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Apple could be made to repay unpaid tax in the EU. Photo: The Daily Show

Regulators are set to break down the reason tax deals given to Apple in Ireland violate EU laws, according to people familiar with the matter.

The European Commission began formal investigations into the tax avoidance issue back in June, and plans to publish its findings as early as today — with the claim that tax deals between Apple and the Irish government could fall under the heading of illegal state aid.

While Apple has yet to make a comment on the matter, the Irish government has spoken up; describing its position as “confident” that the Apple deal represents “no breach of state-aid rules.” It claims that it has already submitted a formal response to the European Commission, in which it addresses in detail “the concerns and some misunderstandings.”

U.S. eyes tax breaks to lure Apple’s billions back home

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Cash-Money

Apple has a massive pile of cash sitting overseas and the U.S. Senate is now weighing options on how to entice Cupertino to bring all $138 billion of it back to American soil.

Senate Democrats and Republicans are reportedly in discussions about passing legislation that would give American companies like Apple and Google a one-time tax break if they repatriate profits stashed overseas.

Apple to be investigated by EU for alleged tax evasion

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Apple is heading toward a $1 trillion market cap. Photo: Pierre Marcel/Flickr CC
Apple is heading toward a $1 trillion market cap. Photo: Pierre Marcel/Flickr CC

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.

Surprise! Digital Content May Actually Cost Less After U.K. Tax Change

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Following a change to VAT (value added tax) legislation in the United Kingdom, there have been a lot of reports suggesting that Apple customers in the U.K. may soon have to pay more when buying from iTunes and the App Store.

As it turns out, those reports are likely incorrect.

You see, Apple has been charging Brits 23% VAT on digital content until now — but the U.K. VAT rate is only 20%.