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EU report set to dish dirt on Apple’s Irish tax deal

The European Commission is expected to release the findings of its investigation into Apple's tax arrangements with the Irish government later today.

According to the Wall Street Journal (opens in new tab), the report is expected to confirm that the deals Apple made between 1991 and 2007 qualify as illegal state aid, giving the company an unfair advantage over its competitors.

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The investigation was launched back in June and focuses on Apple's policy of shifting European profits through its Irish subsidiaries. Apple itself is not at risk of any fines or penalties as a result of the findings, but could be made to pay back any taxes it might owe.

It is unclear how much the US firm would be required to pay back should that scenario occur, but a US Senate hearing into Apple's tax practices last year found that it had avoided paying income tax on approximately $74 billion in profit between 2009 and 2012. The hearing, however, did not find Apple guilty of breaking US tax laws.

Several major businesses set up subsidiaries in Ireland due to the country's relatively low corporation tax rate of 12.5 per cent. By contrast, corporation tax in the US stands at 35 per cent.

If Apple is found to have sold goods or services from other countries to its Irish subsidiary at artificially high prices, this would qualify as illegal state aid as it would reduce the company's overall tax liability.

A spokesperson for Ireland's department of finance has denied that there is any special arrangement between the Irish government and Apple.

"Ireland is confident that there is no breach of state aid rules in this case and has already issued a formal response to the Commission earlier this month, addressing in detail the concerns and some misunderstandings contained in the opening decision."

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Apple, and a number of other companies also being scrutinised by the European Commission, will have 30 days to respond to the report after it is released.

Barclay has been writing about technology for a decade, starting out as a freelancer with IT Pro Portal covering everything from London’s start-up scene to comparisons of the best cloud storage services.  After that, he spent some time as the managing editor of an online outlet focusing on cloud computing, furthering his interest in virtualization, Big Data, and the Internet of Things.