Apple Responds to European Commission Accusation of Billions in Unpaid Taxes

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When it rains it pours sometimes. While Apple has seen phenomenal success with sales of their iPhone 6 and iPhone 6 Plus phones reaching 10 Million easily in just a few days of release, they have still run into some speed bumps as well. From a bad iOS 8.0.1 update to the silly "bendgate" media frenzy, it seems like everyone is piling on Apple all of a sudden. According to the latest news, even the tax man is after Apple!

According to the latest reports, Apple is in trouble with the European Commission for a form of tax evasion to the tune of as much as $8 Billion dollars. Basically, the EC is accusing Apple of working out tax agreements in Ireland in the early 1990s and late 2000s which “confer an advantage on Apple” that breaks European tax laws.

Here's a quote with some of the details from the EC,

In the light of the foregoing considerations, the Commission’s preliminary view is that the tax ruling of 1990 (effectively agreed in 1991) and of 2007 in favour of the Apple group constitute State aid according to Article 107(1) TFEU. The Commission has doubts about the compatibility of such State aid with the internal market.

The Commission wishes to remind Ireland that Article 108(3) of the Treaty on the Functioning of the European Union has suspensory effect, and would draw your attention to Article 14 of Council Regulation (EC) No 659/199935, which provides that all unlawful aid may be recovered from the recipient.

Apple disagrees with this assessment and has repeatedly denied they broke any laws or rules. Here's a quote with their response,

Apple is proud of its long history in Ireland and the 4,000 people we employ in Cork. They serve our customers through manufacturing, tech support and other important functions. Our success in Europe and around the world is the result of hard work and innovation by our employees, not any special arrangements with the government. Apple has received no selective treatment from Irish officials over the years. We’re subject to the same tax laws as the countless other companies who do business in Ireland.

Since the iPhone launched in 2007, our tax payments in Ireland and around the world have increased tenfold. To continue that growth and the benefits it brings to the communities where we work and live, we believe comprehensive corporate tax reform is badly needed.

It's definitely a sticky situation. What do you think the result will be?

Source: BGR