EU ruling on possible fines for Apple

By AFP   August 30, 2016 | 10:40 am GMT+7
EU ruling on possible fines for Apple
The Apple logo hangs in a glass enclosure above the 5th Ave Apple Store in New York, September 20, 2012. Photo by Reuters/Lucas Jackson/Files

Apple could be ordered to pay back taxes to Ireland.

The E.U. is expected to announce on Tuesday its decision on possible fines against American tech giant Apple, which is suspected of receiving preferential treatment from Ireland on taxes, sources said.

For weeks reports have emerged saying that the European Commission, the bloc's competition watchdog, was gearing up to hit Apple with a hefty penalty over tax agreements with the Irish government.

A source close to the matter told AFP on condition of anonymity that a decision was expected on Tuesday, while another source also cited that date.

Under European Union rules, which deem state tax aid illegal, the firm could be ordered to pay back taxes to Ireland.

A commission spokeswoman and Apple both declined to comment on news that a decision was forthcoming.

Apple CEO Tim Cook, in a Washington Post interview published August 13, said he hoped to "get a fair hearing" on the matter.

"If we don't, then we would obviously appeal it," he added.

The U.S. stepped up its fight last Wednesday against the commission's crackdown on tax avoidance by Apple and other multinational companies, accusing it of unilateralism and overstepping its mandate.

In a white paper, the U.S. Treasury said the commission probe into alleged special tax treatment that certain E.U. countries gave Apple, Amazon, Starbucks and Fiat Chrysler "undermines the international tax system."

"Defend our reputation"

A U.S. Treasury spokeswoman declined to comment on a possible ruling Tuesday from the commission.

The U.S. has acknowledged the problems around the issue of multinational firms obtaining state aid, in the form of secret and extremely lucrative tax breaks, from Ireland, Belgium and Luxembourg for setting up business in those countries.

But it said those deals were made under international treaties and accepted tax practices. The Treasury accused the commission in the white paper of taking a "new approach" to established EU tax law in challenging member states' legal tax breaks offered to multinational firms.

Last week the commission denied it was targeting U.S. companies in particular and said that E.U. rules do not allow national tax authorities to give tax breaks to some companies that are not available to others.

If such breaks are ruled illegal, the benefits from them have to be repaid.

"This is a standard feature of E.U. state aid rules," the commission's statement said.

Ireland has stood by its actions, with Junior finance minister Eoghan Murphy saying Sunday: "We don't believe we gave any state aid to Apple".

He reiterated the government's stance that it would appeal any decision that found against Ireland in the matter.

"It's in the national interest that we defend our international reputation in this regard," he said in the comments on RTE, the national broadcaster.

Related news:

Apple plans to take a $1 billion bite into central Vietnam

Apple Inc suffered an outage, some service unavailable for some users.