Apple could face $ 8 bn in back taxes after EC probe

Apple could face a bill to the tune of $8 billion in back taxes after an EC probe into its tax affairs, Bloomberg reported.

Apple, which had said it would appeal any adverse ruling by the EC, had been under the scrutiny of regulators who had accused the iPhone-maker of using subsidiaries in Ireland to avoid paying taxes on revenue generated outside the US.

The probe dates back to 2014 and a delayed decision was expected later this year.

According to the EC, Apple's corporate arrangement in Ireland allowed it to calculate profits using favourable accounting methods, which, according to investigators' preliminary findings, could mean the Irish State had given the business an unfair advantage.

The Commission plays no role in setting or monitoring tax policy in member states, however, it has the power to intervene to prevent companies getting individual state aid.

Apple uses low operating costs, to calculate its tax liability which drastically cuts down the amount it pays to the Irish government.

While Apple generated around 55 per cent of its revenue outside the US, its foreign tax rate was as low as 1.8 per cent, according to Bloomberg's analysis.

The commission had been cracking down on US companies as they sought to strike sweetheart deals with individual EU member nations for the last several years. Starbucks's operations in the Netherlands and Amazon and McDonald's in Luxembourg had all been investigated.

The investigation revealed that Starbucks owed Dutch authorities upwards of $22 million; according to a ruling from Belgium, this week 35 companies across the EU owed the equivalent of $760 million in back taxes.

Apple had already said it would appeal the ruling against the company. Apple chief, Tim Cook termed the investigation ''political crap'' in a recent 60 Minutes interview adding that there was no truth behind it. ''Apple pays every tax dollar we owe.''