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    Monday, March 04, 2024

    Ireland prepares for a fight with EU over Apple tax clawback

    Ireland vowed to fight any adverse decision on its tax dealings with Apple as the European Union prepares to reveal the size of any potential bill facing the world's richest company.

    Irish authorities are bracing for a decision as soon as this week that the state provided the iPhone maker with illegal aid through a sweetheart deal in return for creating jobs in the nation.

    "We don't believe we gave any state aid to Apple," Eoghan Murphy, junior finance minister, told broadcaster RTE. "It's in the national interest that we defend our international reputation in this regard."

    In preliminary findings in 2014, European competition authorities said Apple's tax arrangements were improperly designed to give the company a financial boost in exchange for employment in Ireland. Apple has firmly denied using any tax gimmicks, while Ireland is determined to fight any adverse findings as it seeks to defend the corporate tax code which has drawn companies such as Alphabet Inc.'s Google and Facebook Inc. to Dublin.

    The European Commission declined to comment on a decision that's still pending.

    Apple said it had nothing to add to previous statements rejecting suggestions it received selective treatment from Irish officials.

    "A state aid ruling against Ireland is likely to bring the country's corporation tax regime back into focus," said Dermot O'Leary, an economist at Goodbody Stockbrokers in Dublin. "However, the commission investigation relates to two rulings given to Apple in 1991 and 2007. So a critical issue will be how the final decision relates to the current Irish tax code or to previously amended policy."

    There's a range of estimates out there on the scale of arrears which may face Apple. In a worst-case scenario, Apple may face a $19 billion bill if the government ultimately loses and is forced to recoup tax from the company, according to JPMorgan Chase & Co. analyst Rod Hall. Matt Larson of Bloomberg Intelligence puts the possible figure at more than $8 billion.

    Brussels lawyers speculate that the final amount could be much less, in the hundreds of millions range -- large enough to send a message to companies like Apple and the countries that dole out tax breaks, but not too large to risk creating havoc in case the decisions get overturned in the EU courts.

    The Irish Times reported on Monday that the figure might be not much more than 100 million euros ($112 million).

    The commission in January ordered Belgium to recover about 700 million euros in illegal tax breaks to at least 35 companies, including Anheuser-Busch InBev NV and BP Plc. And last year, for example, Starbucks Corp. was ordered to pay 30 million euros in back taxes to the Dutch government.

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