Tech giant Apple could be facing hefty fines as investigation continues to determine if the Silicon Valley conglomerate really received illegal state aid to avoid paying tax in the last 20 years.
According to United Kingdom's Financial Times, the European Commission is already preparing to file formal accusations against Apple in relation to the company's alleged tax affair in Ireland.
"The European Commission (EC) will launch a formal investigation into the tax strategies Apple employs in Ireland to avoid paying higher taxes, Ireland-based broadcaster RTE is reporting," according to CNET.com.
"According to that report, the central focus of the investigation will be on Ireland's allowance of tax strategies to help companies like Apple avoid paying taxes elsewhere around the world."
Apple is one of several American tech companies (Paypal, Twitter, Facebook and Amazon) to have their international headquarters established in Ireland because of the nation's more lenient corporate tax rate of 12.5 percent.
However, the low corporate tax rate allegedly did not stop Apple from paying a much lower tax (reports indicated 2 percent lower than the normal rate), according to an investigation by the US Senate in 2013.
Initial reports revealed Apple could be withholding 60 percent of their total profits by channeling overseas sales through its international subsidiaries, preventing the money to go back to its main headquarters in the United States, where the company could have been subjected to much more punitive tax rate.
Although the Irish government gave Apple a green light to have lesser tax between 1991 and 2007, the European commission stressed that 'state aids' are considered anti-competitive and illegal. Once proven, the EC could recover a fine worth billions of euro from Apple.
Chief Executive Officer Tim Cook insisted that Apple has not entered into a special deal with the Irish governments and earnestly paid the regular tax imposed by Ireland.
