Unpaid back taxes can cause some serious penalties. Unfortunately, it’s costing Apple $14.5 billion.
According to Bloomberg: “Apple Inc. was ordered to pay as much as 13 billion euros ($14.5 billion) plus interest after the European Commission (EU) said Ireland illegally slashed the iPhone maker’s tax bill, in a record crackdown on fiscal loopholes that also risks inflaming tensions with the U.S. Treasury.”
The European Union regulator’s decision was ruled on Tuesday, implicating that Apple benefited from selective tax treatment that gave unfair advantage over other businesses from 2003-2014.
“It’s the largest tax penalty in a three-year campaign against corporate tax avoidance,” the EU reports.
Apple and Ireland vowed to fight the decision in the EU courts, but the suit does not mean Apple will have to close its doors (although company stocks have declined). As of last month, Apple had $232 billion in cash, with about $214 billion of that being held overseas. Apple generated about $4.45 billion a month last year, which means the decision would eat up three months of profit, as specified by Bloomberg.
Apple Computer Inc. was founded by Steve Jobs, Steve Wozniak and Ronald Wayne on April 1, 1976 and renamed Apple Inc. on January 9, 2007. This is not the company’s first time in a major lawsuit. On December 2015, Samsung submitted documents stating that it had agreed to pay Apple $548 million for violating copyright laws.
Sheesh! What do we have to learn from this? Never try to cheat the system! We wish Apple the best.
Written By: Cynthia Casimir