Apple is being scrutinized by European officials, who accuse the company of using subsidiaries in Ireland to avoid paying taxes on revenue generated abroad. While Apple generates about 60 percent of its sales outside the U.S., its foreign tax rate is about 1.8 percent, according to Bloomberg Intelligence analyst Matt Larson.
“If the commission follows its own precedent” from recent cases “and effectively requires Ireland to impose the statutory tax rate, Apple will be looking at around 10 percentage points of tax on substantially more than a hundred billion dollars of profit from a decade of sweetheart deals,” said Alex Cobham, director of research at the Tax Justice Network.
The 1.8% rate we already know about as it’s actually pointed out in Apple’s own accounts.
But our test is whether Alex Cobham is full of shit or not. Because the Commission just ins’t investigating the thing that gives Apple that 1.8% tax rate (which is the way that IP is housed in Bermuda).
So, a bit of a bet, or at least throwing a marker down. If Apple loses this I think they’ll have to pay maybe €200 million to cover the decade. Alex Cobham, of the TJN, thinks they’ll pay $8 billion. March isn’t that far away so let’s wait and see, shall we?