Apple Inc. (NASDAQ:AAPL) has been undergoing a long-term investigation from the European Commission over its tax arrangements in Ireland. Previous criticisms indicate that it is holding vast sums in an offshore tax haven which has led to the evasion of tax payment.
However, this has not deterred the company which is the largest taxpayer in the world from submitting its taxes in time including the £12.9 million paid in UK corporation tax last year. Despite all the tax evasion claims, Apple has continued to report remarkable global results from its sales. For example, for the three months to December 2015, the company reported a whopping £53.3billion which resulted to a £37.5billion of profits.
Apparently, Apple still makes an overwhelming proportion of profit from its headquarters base in Ireland where sales are rather too slow. The standard rate in Ireland that Apple pays of 12.5% is much lower than Britain’s corporate tax rate of 20%. However, Apple still has a 2.5% corporation tax to pay which it negotiated under a special arrangement with the Irish government.
Hence if the agreement were to backfire given the trending claims of tax evasion, then Apple would have nothing to do with having broken the law. Instead, it would be the Irish government.
But in a new twist of events and despite the arrangement, Apple would still be required to pay an estimated $8B being a back-tax outlined earlier in the year. Other global giants Facebook Inc (NASDAQ:FB) and Alphabet Inc (NASDAQ:GOOGL) Google have already made their pledge to pay.
There is a lot behind the scenes regarding tax payment. But in a quick response, Apple’s spokesman refuted claims by the European Commission citing that the company had kept its share of the bargain of paying its taxes. The spokesman stated that for the past 36 years the company had faithfully obeyed its obligation.
Nevertheless, the results of the investigations are yet to be made public and even with the exit of the UK from the EU nothing will change as far as the investigations are concerned.