European Union Stories March 16, 2016

AAPL: 105.97

1.39

Called before the European Parliament’s tax committee yesterday to explain its tax arrangements, Apple’s VP of European operations denied that the company received illegal state aid, reports Bloomberg.

“We feel that we’ve paid every cent of tax that is due in Ireland,” Cathy Kearney said at the European Parliament in Brussels. “We don’t feel that there has been state aid involved and I suppose we look forward to that outcome happening at the end of the day and being vindicated in that way. I would say that the Irish government also agrees with that view.”

Kearney also denied suggestions that the special tax deal with the Irish company was the reason it had chosen the country as its European HQ …

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European Union Stories March 15, 2016

AAPL: 104.58

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Pressure on Apple over European tax affairs ramps up as European Parliament seeks explanations

With a long-running investigation into the legality of Apple’s tax arrangements in Europe not expected to end any time soon, the company will come under additional pressure tomorrow when it is called before the European Parliament’s tax committee.

European Union Stories March 9, 2016

AAPL: 101.12

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The European Union warned us this week not to expect a speedy conclusion to the long-running investigation into the legality of Apple’s tax arrangements in Europe. The delay follows a decision back in December to expand the scope of the investigation.

But while the wheels of EU tax investigations may grind exceedingly slowly, I’d be willing to wager quite large sums of money on the final outcome. It looks to me increasingly clear that Apple’s tax arrangements with the Irish government are going to be declared illegal, and that Apple is going to be faced with a significant bill for unpaid tax …

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European Union Stories March 7, 2016

AAPL: 101.87

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EU competition chief warns “don’t hold your breath” on $8B investigation into Apple’s tax affairs

European Union competition chief Margrethe Vestager has warned reporters not to expect a quick decision from the investigation into whether or not Apple’s tax arrangements in Europe are legal, reports Bloomberg.

“Don’t hold your breath,” she told reporters in Brussels on Monday about the timing of decisions targeting Apple and online shopping giant Amazon.com Inc, whose tax affairs in Luxembourg are also under intense scrutiny. “I’m just warning you.”

Apple uses Ireland as its European headquarters, funneling most revenue through the country, where it has a special arrangement with the Irish government to pay corporation tax of just 2.5%. The EU believes this arrangement may be illegal for two reasons …

European Union Stories January 15, 2016

AAPL: 97.13

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With a recent European Commission ruling making it look more likely than ever that Apple’s tax arrangements in Ireland will be declared illegal, Bloomberg has been doing the sums on how much the company may owe in back tax. The total? More than $8 billion.

Apple funnels all its European revenue through Ireland, where a special agreement with the Irish government means that it pays just 2.5% tax instead of the normal 12.5%. A long-running European Commission investigation into the legality of this arrangement was recently extended and expanded its scope.

Assuming the agreement is ruled to be illegal, it would be the Irish government – and not Apple – who broke the law, but Apple would still have to pay the difference between the tax it actually paid and the full amount that would have been due without the deal. The company warned shareholders last year that it may have to pay ‘material’ back taxes, but the figure calculated by Bloomberg is much larger than earlier estimates …

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European Union Stories January 11, 2016

AAPL: 98.53

1.57

Belgian ruling increases likelihood that AAPL’s sweetheart tax deal in Ireland will be ruled illegal

The European Commission has ruled that tax breaks offered by Belgium to multinational companies are illegal, and that the companies concerned must pay the full rate of tax due in the country, reports VentureBeat. This follows similar decisions in Luxembourg and the Netherlands.

While none of these rulings directly impact Apple, they do make it look extremely likely that the Commission will reach the same decision in Ireland, where Apple pays just 2.5% corporation tax instead of the normal 12.5%.

The Irish government offered Apple the special deal in order to encourage the company to choose the country as its European headquarters. The European Commission has been running a lengthy investigation into the legality of this arrangement, and has recently extended and expanded its scope.

If Ireland is indeed found to have broken the law, Apple will have to pay the difference in tax for up to ten years. The total amount was estimated last year at $2.5 billion. Apple warned shareholders at the time that it may face ‘material’ back taxes should the decision go against it.

The EC isn’t the only entity unhappy with Apple’s tax arrangements in Ireland either. The Italian government accused Apple of failing to declare more than $1.3 billion of corporation tax in the country as a result of funneling profits through to Ireland. Apple, which has 16 retail stores in the country, recently agreed to pay the full €318M ($347M) claimed by the Italian tax office.

Photo: AP Photo/Rick Rycroft

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