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.”
In January this year, Tim Cook travelled to County Cork, Ireland, to meet with the Irish prime minister to discuss Apple’s presence in the country, along with the Irish tax laws that help it avoid paying billions extra.
Apple previously came under fire for tax practices involving the channeling of 64% of earnings into Irish subsidiaries with zero employees in order to minimize tax burdens. Irish officials have shied away from accepting blame for the company’s low tax bill, while Tim Cook and then-CFO Peter Oppenheimer appeared before a Senate sub-committee to discuss the subject of tax avoidance.
Apple itself is not under investigation in this present matter, but if it is concluded that the current arrangement falls under the bracket of state aid, it could be made to pay any unpaid taxes. It’s not known how big these sums might be.
Whatever the EU’s decision, Apple gets 30 days to respond. Automaker Fiat is also a company named as part of the investigation, based on a similar tax deal in Luxembourg.
Source: Wall Street Journal
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
5 responses to “EU plans to publish details of Apple’s alleged tax evasion”
How does it break the law if the appropriate government agency approved and approves of your action?
Yeah, you sic em. Coz no other tech company does this, right?
I am no Apple fan, but I am a fan of the laws, and when a company uses Tax Loopholes, they aren’t doing anything illegal. If this is an “issue”, then government needs to begin minimizing these “issues”, and making them illegal.
Maybe if the US lowered their Tax Code, then we would have more manufacturing and other businesses coming here.
If Ireland is saying that Apple is doing nothing illegal, then Apple is obeying the laws of the country. Since Ireland is a signatory and member of the European Union, it’s up to Ireland to change their laws to abide by EU regulations, disagree with EU regulations or withdraw from the EU. Any way you look at it, it’s up to Ireland to set their taxes as they see fit. This is not Apple “trying to get away from paying taxes”. Apple is compliant with Irish law as it stands today.
Should Ireland change its laws, Apple will either continue to be in compliance by paying the new legal taxes, or will decide to move somewhere else. These articles stating that Apple is somehow doing something illegal are hogwash. Every company on the planet tries to reduce its taxes as much as possible. Companies hire accountants to purposely find ways of reducing their tax burden. Why is Apple singled out for being bad because it also does this? Just because Apple is a very successful company, they do not “owe” anyone any money over and above the laws of the land.
I don’t get why people who work and pay their fair share of taxes defend companies that use loopholes to get out of paying theirs.
Its isn’t legal, it is a loophole and by definition an inadequacy in the intent of the law.