Apple facing record bill for Irish tax

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Apple could be ordered to pay billions of euros in back taxes in the Republic of Ireland by European Union competition officials.

The final ruling, expected on Tuesday, follows a three-year probe into Apple’s Irish tax affairs, which the EU has previously identified as illegal.

The Financial Times reports that the bill will be for billions of euros, making it Europe’s biggest tax penalty.

Apple and the Irish government are likely to appeal against the ruling.

Under EU law, national tax authorities are not allowed to give tax benefits to selected companies – which the EU would consider to be illegal state aid.

According to EU authorities, rulings made by the Irish government in 1991 and 2007 allowed Apple to minimise its tax bill in Ireland.

Apple’s company structure enabled it to legally channel international sales through Ireland to take advantage of that tax deal.

US warning

The investigation into Apple and similar probes into other US firms have been criticised by US authorities.

Last week the US Treasury Department said the European Commission was in danger of becoming a a “supra-national tax authority” overriding the tax codes of its member states.

Brussels was using a different set of criteria to judge cases involving US companies, the US Treasury warned, adding that potential penalties were “deeply troubling”.

Apple is not the only the company that has been targeted for securing favourable tax deals in the European Union.

Last year, the commission told the Netherlands to recover as much as €30m from Starbucks and Luxembourg was ordered to claw back a similar amount from Fiat.

But Apple is potentially facing a much bigger bill.

The EU’s Competition Commission would want Dublin to reassess Apple’s tax liability and the ruling could force the company to restate its accounts.

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