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Apple Warns Shareholders of Changes to Irish Tax Structure

Apple Warns Shareholders of Changes to Irish Tax Structure

Apple has informed its shareholders that it could be seeing changed tax rates as new international legislation comes into effect.

Apple's Ireland Office
Apple’s Ireland Office


In its annual 10-K filing to the Securities and Exchange Commission, Apple said that while most of the company’s hardware was manufactured in Asia, the company also performs final assembly of certain products at its manufacturing facility in Cork, Ireland.

“Due to economic and political conditions, tax rates in various jurisdictions may be subject to significant change,” the company wrote in its filing.

The company added that the European Commission could require changes to existing tax rulings that may increase Apple’s tax burden in the future. The EC could also possibly require Ireland to recover past taxes from the company, if they are ruled to have constituted state aid.

The European Commission published a letter to the Irish government back in September, where the 28-member bloc’s central antitrust authority said it had reached a “preliminary view” that Ireland’s 1991 and 2007 tax deals it struck with Apple constituted state aid.

In response to the EC letter, a spokesman for Apple said at the time that the company had “received no selective treatment from Irish officials over the years,” and that its tax payments “in Ireland and around the world have increased tenfold” since 2007. “We’re subject to the same tax laws as the countless other companies who do business in Ireland.”

Apple employs more than 4,000 people in Cork, where all its Irish subsidiaries are based. The company paid less than $25.4 million USD in taxes in Ireland for each of the years 2010-2012.

Apple may be asked to pay up to $200 million in back taxes, according to Heather Self, a tax partner at Pinsent Masons LLP in London. She noted the company could also agree to pay a smaller amount to settle, or pay nothing if Ireland offers a effective defense.

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