Report: Apple’s European bill for back taxes could hit $8 billion

Apple could owe some $8 billion in back taxes in Europe, according to a new report.

European Commission investigators are scrutinizing Apple’s use of an Irish subsidiary to substantially lower its tax bill. Bloomberg Intelligence analyst Matt Larson examined Apple’s financial records to estimate the company’s potential tax liability if the investigators rule against it.

Larson estimates that between 2004 and 2014, Apple’s Irish subsidiary generated $64.1 billion in potentially taxable income. At a 12.5 percent tax rate, Apple should have paid more than $8 billion in taxes. The European Union, meanwhile, contends that Apple paid a tiny fraction of that amount.

Tax authorities in Europe have been probing Apple’s tax practices since 2014 as part of a larger investigation into corporate tax schemes. The E.C. could issue a decision as soon as March, according to Bloomberg.

Apple’s tax practices are also under scrutiny by the Internal Revenue Service in the United States. In an interview on CBS’ “60 Minutes” last month, Apple CEO Tim Cook called allegations that the company is dodging taxes “total political crap,” asserting that the company pays what it is legally required to pay.

The taxes paid by Cupertino company have been in the spotlight since the New York Times published an investigation four years ago that detailed the steps Apple takes — such as routing sales through low- or no-tax jurisdictions — minimize its tax liability. The Times’ piece was followed by a pair of reports by tax experts in 2013 that asserted that Apple had basically no taxes on the more than $100 billion in cash it had held overseas at the time. Those reports were the subject of a congressional investigation and a hearing at which Cook was questioned about the company’s practices.

File photo: The Bill Graham Civic Auditorium in San Francisco is decorated for an Apple last September. (Karl Mondon/Bay Area News Group)

 

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  • Moshe Pipik

    San Jose bashes Apple 99 out of 100 articles. This is also a hatchet job.

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