Bloomberg Shares the Inside Story of Apple’s $14 Billion EU Tax Bill

Back in August, the European Union (EU) Commission ruled after two years of in-depth investigation of Apple’s tax affairs in Ireland, that the company has to pay up to $14.5 billion in back taxes to the Irish government. Today, an interesting “inside story” of Apple’s gigantic EU tax bill has been published by Bloomberg, giving out details of “The Maxforce”, the EU team behind the investigation that spurred changes to international tax law.

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The Maxforce team, which is led by a German attorney named Max Lienemeyer, has looked at the tax status of hundreds of companies across Europe since its launch in 2013, including a deal Starbucks had in the Netherlands and the Fiat Chrysler Automobiles’ agreement with Luxembourg, although Apple’s case in Ireland is its largest by far.

The team’s investigation on Apple’s tax practices in Ireland concluded that the country allowed the iPhone maker to create stateless entities that let it decide how much tax it pays. It also highlighted that when a unit called Apple Sales International recorded profits of about 16 billion euros from sales outside the U.S. in 2011, only 50 million euros were considered taxable in Ireland.

In the coming weeks, the EU is expected to publish details of the Maxforce investigation. At about the same time, Apple will likely lodge its own appeal in the EU court. Though Apple will have to pay its tax bill within weeks, the money will be held in escrow, and the issue will probably take years to be resolved. 

This story is based on interviews with dozens of officials from the EU, Ireland, and Apple, though most didn’t want to speak on the record discussing sensitive tax matters. A Maxforce representative declined to make Lienemeyer available for an interview. 

To read more about how Lienemeyer assembled the Maxforce, check out the lengthy article at this link.

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  • m Arch Tom’s on Bar N Ass

    you just can’t have stateless entities in EU. either you register as a int’l company ( a foreign company with sales offices and sales only tasks/activities then outsourcing everything else to local business ) or register as a multi-national organization ( defined already in earlier comments. MULTI= every subsidiary has different tasks/activities corroborating organization mission and vision. Whenever you duplicate tasks and activities it may be for locales and language support purpose ). both int’l and MULTI”s are requested to announce the industry they want to operate with, also stating activities and sector of the industry they are planning to cover.
    ALL is meant to safeguard competitors business that are locally based in EU, and also safeguarding consumers when entities enquiring relevant industry regulators and to start operating or start operations were never incl. in former agreements – DRAFT