The European Commission is set to rule that Apple received illegal tax benefits from the Irish government; and will require the company to pay several billion Euro in back taxes. While the ruling is not yet official, the information comes from EU competition commissioner Margrethe Vestager who has reportedly circulated a 130-page ahead of the ruling.
This turn of events is the final product of investigations against Apple’s tax practices which began in 2014. EC officials began scruntinising tax deals between Apple and Ireland from 1997 and 2007. Essentially, the investigators have found that Apple has only been paying 2-percent corporate tax; which is far below the 12.5-percent specified by Irish law.
The amount of back taxes Apple owes the European Union is still under wraps; although Bloomberg claims that it could be as high as €19 billion (about RM85 billion). Conversely, the Irish Times believes that it could be as low as €100 million (about RM450 million). In either case, both Apple and the Irish are expected to appeal against the decision.
Apple continually maintains that it has always complied with tax laws in the countries where it operates; and reminds people that it is the largest taxpayer in the world. To be fair, the problem is not so much that Apple does not comply with the law; rather that it takes advantage of loopholes and technicalities to reduce the amount of tax it needs to pay.
The EC has been clamping down on multi-national companies it believes to be using the same tax avoidance techniques. Several Google offices in Europe have been raided by tax officials looking for information, while Facebook has similarly come under scrutiny.