The European Commission (EC) is today expected to release initial details of a probe into Apple's tax arrangements in the region that could see the U.S. smartphone maker fined billions of Euros.
Several reports state the EC will explain why it opened the investigation into two tax deals struck between Apple and the Irish government in 1991 and 2007, which the Commission believes amount to illegal state aid, the Wall Street Journal reported, citing an EC source.
An Irish government spokesperson told the Journal it is confident the deals with Apple are sound, adding that the government has already given a formal response to the EC to address what it regards as a misunderstanding of the arrangements with Apple.
Apple, which benefited from a tax rate of just 2% in Ireland, has stated that it has not broken any laws or taken any state aid, the Financial Times reported.
The EC's interest was pricked in 2013, when hearings in the US Senate showed that Apple had moved billions of dollars-worth of its profits out of the U.S. to international subsidiaries where it had no declared tax residency, the FT added.
Google has also been implicated in the EC tax investigations, along with global coffee shop company Starbucks. The EC is currently probing deals involving the companies in the Netherlands and Luxembourg Reuters reported.
Several EU member states offer a lower real-world corporate tax rate than their headline figures to attract the business of large companies, the news agency added.
For more:
- see this Financial Times article [subscription required]
- read this Wall Street Journal report
- view this Reuters article
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