Readers like you keep news free for everyone.

More than 5,000 readers have already pitched in to keep free access to The Journal.

For the price of one cup of coffee each week you can help keep paywalls away.

Support us today
Not now
Advertisement

Apple is worried it will have to pay back-taxes to Ireland... and the bill could be BIG

Grief over that claimed ‘sweetheart’ tax deal just won’t go away.

Image: Marcio Jose Sanchez/AP/Press Association Images

APPLE HAS ADMITTED it could be hit with a back-taxes bill for its Irish operations if European authorities decide the US tech giant got a sweetheart deal from local officials.

And the world’s most valuable public company has acknowledged how heavily its bottom line depends on paying low taxes in the Republic, where several of the company’s offshoots are set up.

In an annual filing for US regulators, Apple warned that if the European Commission decided its tax affairs in Ireland amounted to illegal state aid it could be forced to repay some of the money it effectively got in subsidies.

While it didn’t put a figure on the unpaid taxes it could be slugged with, the sum has been estimated at about €160 million.

The commission has claimed Apple got preferential tax treatment in Ireland for nearly 20 years via to two locally-registered subsidiaries, Apple Sales International (ASI) and Apple Operations Europe.

How much money are we talking about?

While ASI told US authorities its 2012 sales revenue was $63.9 billion (€50.9 billion in today’s money), Ireland agreed to fix its taxable income – the amount it attributed to its local operations – at between €50-€60 million that year. That’s about 0.1% of the total revenue figure.

In a nutshell, Apple is accused of passing billions in sales revenue through the offshoot while apparently paying a pittance in tax.

Making a difference

A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article.

Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

For the price of one cup of coffee each week you can make sure we can keep reliable, meaningful news open to everyone regardless of their ability to pay.

Irish authorities didn’t identify what country either company was officially resident in for tax purposes, the commission said.

In its latest filing, Apple said if the commission made a final decision against it then that could mean “changes to existing tax rulings that, in turn, could increase the company’s taxes in the future”.

The European Commission could also require Ireland to recover from the company past taxes reflective of the disallowed state aid,” it said.

Apple added that if the amount it had to pay in future taxes went up - particularly in the US and Ireland – or if its tax bills for previous years were increased then its “operating results, cash flows and financial condition could be adversely affected”.

Both Apple and the Irish government have denied striking any preferential tax deals.

READ: Here’s what we know about the EU’s claim that Ireland gave illegal state aid to Apple >

READ: David Cameron is not happy with Ireland’s tax regime – because he ‘wants our jobs’ >

About the author:

Peter Bodkin  / Editor, Fora

Read next:

COMMENTS (37)