Several multinational companies are known to follow one or the other path to save on taxes but in case of Apple Inc (NASDAQ:AAPL), the problem might worsen up into a huge tax repayment order.
Apple Inc (NASDAQ:AAPL) was accused by the U.S. senators for using Ireland as the “holy grail of tax avoidance.” In addition to affecting the reputation of the company, Brussels investigation draws attention in terms of global tax reforms. The Irish government has already denied any such illicit purposes and Apple Inc (NASDAQ:AAPL)’s financial chief said, Luca Maestri,
“It’s very important that people understand that there was no special deal that we cut with Ireland. We simply followed the laws in the country over the 35 years that we have been in Ireland.”
Brussels Investigation targets competition issues and if the judgment is against Apple Inc, it could lead to a potential fine. Further, this is not the first time when Brussels has targeted a company for tax and competition concerns, as companies like Amazon.com, Inc. (NASDAQ:AMZN) and Starbucks Corporation (NASDAQ:SBUX) have already faced such allegations.
Brussels investigation came into light when Apple Inc was accused of pressurizing Irish government for special tax privileges, which offered an upper hand to the company against local rivals. Maestri further added,
“If the question is, was there ever a ‘quid pro quo’ that we were trying to strike with the Irish government – that was never the case.”
He further added that Apple Inc works according to the tax structure of the country and in case of any tax structure changes n future, it would adhere to them.
Apple Inc (NASDAQ:AAPL) said in its defense that ongoing tax rates with Irish authorities are justified and offer no advantage to the company. There are chances that in case of a judgment against the company, Apple Inc might end up paying up to €1 billion in tax repayment and Brussels Investigation might even include other technology giants in future including Google Inc (NASDAQ:GOOGL) and Microsoft Corporation (NASDAQ:MSFT). It might even end the low tax haven benefits enjoyed by the company in Ireland.
This article has been written by Prakash Pandey.