Apple could be liable for $19bn says JP Morgan
Published 09/05/2015 | 02:30
Apple could see its annual earnings reduced by almost 10pc in a worst case scenario if a European Commission investigation into the company's tax arrangements in Ireland goes against it, it's been claimed.
A research note issued to investors by US banking and financial services giant JP Morgan claimed that in a worst case scenario where the Commission applied a 12.5pc tax rate to Apple's "relevant" Irish profits, which it calculates as being $153bn accumulated over a ten-year period, the US tech giant could be liable to pay as much as $19bn.
The US bank estimated that a worst case ruling could have even more of an impact in the future. It claims that Apple runs $42bn, or 59pc, of its profit before tax through Ireland, and said that the company paying a rate of 12.5pc on that amount would reduce its annual earnings by just under 10pc.
It also said that based on its work so far "we believe that a negative EC ruling is more likely than not", although it added that there are also several outcomes, including a negative ruling, that would not hit Apple as hard financially.
Brussels has accused Ireland of striking a tax arrangement with the technology giant that gave the company an advantage that amounted to State aid and went against international guidelines. The Government has repeatedly said there is no case to answer.
The European Commission recently announced that it would miss its self-imposed June deadline, with European competition commissioner Margrethe Vestager saying that she would "not give deadlines for the finalisation of these cases".