Apple’s Irish Tax Problem…
Earlier this week Apple was effectively given an overdue tax bill from the European Union’s anti-trust commission for around $15 billion. Apple can certainly pay one $15 billion bill. However, this would also eliminate its related tax breaks from Ireland, which protected Apple profits across the EU and that will have a lasting, painful impact on its financial performance.
Why I think Apple is screwed is that this massive tax is very material to every Irish citizen—about $3,000 per person—making it very likely that those that support Apple and are currently fighting the EU will be politically motivated to change sides or lose their elected jobs. For instance, assuming you are in the US, if you were told that finding against Apple would reduce our own personal Tax bill by $3,000, would you support Apple or—like most—figure Apple kind of owes you the money because it made so much off you over the last few years (Apple does have something like $500 billion in reserves).
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NOTE: This column was originally published in the Pund-IT Review.