Ireland will probably face censure from European authorities within months in relation to its tax dealings with Apple, according to a person with knowledge of the matter.
A finding against Ireland will spark a legal battle that may last years, as the government is ready to fight the decision in the European Union Court of Justice, it’s understood.
In preliminary findings last year, European antitrust authorities said Apple’s tax arrangements were improperly designed to give the iPhone maker a financial boost in exchange for jobs in the country. Apple said in 2013 it had paid an effective tax rate of less than 2 per cent in Ireland over the previous 10 years.
The EU inquiry comes amid a global crackdown on corporate tax affairs, with the European Commission estimating that tax avoidance and evasion in the region cost about €1 trillion a year. In a worst-case scenario, Apple may face a $19 billion bill, according to JPMorgan Chase & Co analyst Rod Hall.
Apple has said in the past that it doesn’t use “tax gimmicks.” An Apple spokeswoman wasn’t able to comment on any possible commission finding. The European commission declined to comment, while Ireland’s finance ministry said no final decision has been taken.
“The European Commission has not indicated a time line for a decision,” it said in an e-mailed response to questions.
Bloomberg
