State facing EU censure over Apple tax dealings

Ireland will probably face censure from European authorities within months over its tax dealings with Apple, according to a person with knowledge of the matter.

Analysts yesterday estimated that Apple could face a bill of up to €17bn if the decision goes against the Government.

A finding against Ireland will spark a legal battle that may last years, as the Government is ready to fight the decision in the European Union Court of Justice, according to the person, who asked not to be named because the case is ongoing.

In preliminary findings last year, European competition authorities said Apple’s tax arrangements were improperly designed to give the iPhone maker a financial boost in exchange for jobs in the country.

Apple said in 2013 it had paid an effective tax rate of less than 2% in Ireland over the previous 10 years.

The EU inquiry comes amid a global crackdown on corporate tax affairs, with the European Commission estimating tax avoidance and evasion in the region cost about €1tn a year.

“The commission’s initial findings appear to be quite robust”, said Marco Hickey, head of EU, competition and regulated markets at Irish law firm LK Shields, which is not involved in the case.

“Based on that, it would seem they’re more minded than not to make a negative final decision against Ireland.”

Apple has said in the past it doesn’t use “tax gimmicks”. An Apple spokeswoman wasn’t able to comment on any possible finding. The European commission declined to comment, while the Department of Finance said no final decision has been taken.