DUBLIN: Apple has gone public with concerns about the investigation of its tax arrangements with Irish authorities, warning shareholders that it might face a demand for 10 years of back payments of tax if the EC rules against the Irish tax position.
The worry comes from Apple’s quarterly report filing with the SEC, in which it warns of impending tax demands in a specific section about income taxes.
The problem arises from Apple’s paying of around 2 per cent corporation tax in Ireland, compared to the average 12.5 per cent — a fact the EC says amounts to a bizarre form of “state aid” from the Irish for the vastly wealth US tech giant.
In US financial regulatory speak, a “material” impact usually refers to a drop of around 5 per cent of the company’s pre-tax earnings, which the FT estimates could amount to a $2.5bn (£1.6bn) fine.
