EU will order Ireland to collect over $1B in back taxes from Apple - report

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On Tuesday the European Commission will find against Ireland's tax arrangements with Apple, and ask the country to collect over 1 billion euros ($1.119 billion) in back taxes, a report claimed on Monday.

In fact the Commission will simply make a recommendation on the total it expects to be collected, leaving the Irish government to calculate the exact amount, one of two sources elaborated to CNBC. Some analyst estimates previously suggested that Apple could owe upwards of $8 billion.

The E.U. has been probing Apple's Irish tax arrangements since 2013, suggesting that the government extended preferential treatment — and hence illegal state aid, under E.U. rules — in order to attract the company's jobs and money. Exploiting various loopholes, the company managed to lower its tax rate on billions in international revenue to just 2 percent, far removed from the 12.5 percent it would usually owe.

Both Apple and the Irish government have denied any wrongdoing and promised to fight any unfavorable ruling, but precendent is not on their side. The Commission has already issued similar findings against the Netherlands and Luxembourg, for their respective tax deals with Starbucks and Fiat Chrysler.

The potential size of the Irish ruling has led Apple CEO Tim Cook and even U.S. Treasury Secretary Jack Lew to put pressure on the Commission. Last week, for instance, a white paper ordered by Lew claimed that the E.U.'s competition directorate is turning into a "supranational tax authority," and undermining "tax certainty."

 
 

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