Apple Inc. has for years legally transferred its international sales through Ireland to leverage the tax system.
Apple Facing Massive Bill for Back Taxes in Ireland
Apple’s organizational structure allows for the legal transfer of international sales. However Margrethe Vestager, the EU competition commissioner is expected provide estimations of the amount of back tax Apple would need to pay.
Even then, Irish authorities have the final say on the exact amount the technology giant owes.
US authorities have lashed back at the EU’s investigation of Apple and other US companies.
In a statement, the US Treasury Department said that there were risks of the European Commission becoming a ‘supra-national tax authority’ and that it was extending its mandate beyond the tax laws of its member states.
The US Treasury further warned that the Commission was applying different criteria on US companies adding that the harsh penalties were saddening.
There are reports that the US Treasury has concerns that if Apple pays the large tax bill owed to the EU, the tech giant would offset some of the amount against what it would need to be paying in the US.
Essentially, paying the massive tax bill would potentially move billions of dollars from the US economy to Europe, a move the US is against.
Apple is one among several companies that are under investigation for leveraging favorable tax deals in the EU.
Last year, the Commission requested Netherlands to recover back taxes of up to $25.6 million from Starbucks. Luxembourg was also told to take back a similar amount from the carmaker Fiat.
There is a possibility that Apple’s tax bill is much larger. However, the company will have few difficulties paying up thanks to its cash reserves of over $200 billion.
Even then, the US-based technology company would be forced to restate its accounts after the ruling by the Commission.