Apple faces the prospect of close scrutiny from UK tax officials, after allegations the company paid just £10 million in tax FY10, on close to $10 billion in sales.
Apple is believed to have paid £10.3 million ($16.4 million) in corporation tax for the year to September 25 2010, The Telegraph reported.
But the UK market is estimated to account for a tenth of Apple's worldwide sales, which last year totaled $100 billion.
Apple reportedly avoids paying higher taxes by using offshore subsidiaries in Ireland and the British Virgin Islands.
Tax exerts expect the UK's Revenue & Customs, which has already pledged to clamp down on “morally repugnant tax dodging” to carefully investigate the situation.
But the fact that Apple products have been developed with IP originating from outside of the UK complicates the situation for the nation's tax officials.
More than half of Apple's profit comes from outside of the US.
Online retail giant Amazon is also facing an investigation by the tax officials, over allegations that it has not paid corporation tax on the nearly £8 billion in UK retail sales it has generated over the last three years.