Apple: EU Irish tax probe could affect cash flow, lead to ‘material’ costs
SAN FRANCISCO, April 30 — Apple Inc. has raised a flag about the potential cost if the company is required to pay past taxes to Ireland as part of a European Commission investigation that started last year.
While Apple hasn’t been able to estimate the amount, it could be “material,” the Cupertino, California-based technology company said Tuesday in a filing with the US Securities and Exchange Commission. It had said in January that such an action could “adversely” affect its cash flows and financial condition.
The European Commission last year said it was looking into whether Ireland improperly gave Apple’s two subsidiaries state aid. In September, the commission said Irish tax authorities failed to conform to international guidelines when they “reverse engineered” an agreement with Apple to determine the company’s bills. The findings were preliminary.
“The company believes the European Commission’s assertions are without merit,” Apple said in the filing. “If the European Commission were to conclude against Ireland, the European Commission could require Ireland to recover from the company past taxes covering a period of up to 10 years reflective of the disallowed state aid.”
The European Commission’s review of state aid can take more than a year and decisions can be challenged at the European Court of Justice in Luxembourg.
Apple “did not receive selective treatment and was taxed fully in accordance with the law,” the Irish Finance Ministry has said.
Over a four-year period, Apple shifted US$74 billion (RM261.9 billion) in profits to an Irish entity that had no “tax residence” anywhere in the world, and thus owed minimal income taxes to any country, the US Senate Permanent Subcommittee on Investigations found in 2013. Apple finished the most recent quarter with US$194 billion in cash and securities. More than US$171 billion of that was held outside the US, according to Apple. — Bloomberg
