Mediaboss Marketing

The European Union's competition watchdog said Tuesday Ireland appears to be granting Apple illegal tax rebates that may have to be recovered. If the EU's finding is confirmed over the next few months, Apple could face a repayment bill worth billions of dollars. The company funnels the bulk of its international sales through subsidiaries in Ireland, where it benefits from low and negotiated tax deals. Apple says, 'We're subject to the same tax laws as the countless other companies who do business in Ireland.' The company also mentioned its tax payments to Ireland increased tenfold since it launched its first iPhone in 2007. Apple's tax practices have also been scrutinized in the United States. Last year a Senate Committee published a report estimating the firm avoided at least $3.5 billion in U.S. federal taxes in 2011 and $9 billion in 2012 by using its tax strategy. According to the latest quarterly report in June, Apple sat on roughly $164 billion in cash and cash equivalents, with $138 billion stashed away in foreign subsidiaries. The company estimated its effective U.S. tax rate is 26.1%, as opposed to the statutory U.S. rate of 35%, primarily because of undistributed foreign earnings.

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European Union Says Ireland Grants Apple Illegal Tax Benefits