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Apple's Irish tax loophole may force it to pay back taxes

By booking sales through its international headquarters in Ireland, Apple was able to only pay £12.9 million in UK corporate tax during 2015. This was a 9 per cent increase from the previous year in which it paid £11.8 million.

The European Commission has been investigating Apple's tax arrangements in Ireland for two years now and the results of the probe are set to be released as early as next month. If the company's tax arrangements are found to be unlawful, it could end up repaying billions to the Irish state.

The company is currently under pressure from its critics who believe that it is not paying a fair share given the amount of business it makes in the UK. However, Apple has said that it pays “all that we owe according to the law.” The company also pointed out the thousands of British jobs it supports.

Concerning the matter, a spokesperson for the company, said: “Apple is the largest taxpayer in the world and we pay all that we owe according to the law. We have a long history in the UK and are proud of the significant contributions we've made over the past 36 years.”

Facebook and Google are guilty of the same crime as apple but the two companies came forward and have since pledged to pay more corporation tax in the UK. Ireland is a modern meeting place for multinational tech companies as a result of its low corporation tax rate.

Earlier this year, Google agreed to pay £130 million in back taxes. Facebook on the other hand will be booking more advertisements in the UK in response to a new tax from George Osborne called the diverted profits tax that only taxes income generated from within the UK.

Image Credit: Shutterstock / Andrey Bayda

Anthony Spadafora
After living and working in South Korea for seven years, Anthony now resides in Houston, Texas where he writes about a variety of technology topics for ITProPortal.