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Apple faces a record fine in Europe over alleged illegal tax-dodging practices

Apple Record Tax Fine

Apple is not done facing tax-related inquiries, The Financial Times reports, as the European Union is investigating the company’s tax deal with Ireland. Preliminary findings apparently claim that Apple has benefited from illegal state aid after it reached certain special agreements with the Irish government that others companies based in the region — including Amazon, Facebook, PayPal and Twitter — do not enjoy.

Apple is paying less than 2% in taxes in Ireland, after operating tax-free from 1980 to 1991 when the local laws changed. That year, Apple apparently struck a deal with authorities that was revised in 2007, following Apple’s growth.

The company is now facing a multi-billion dollar fine, according to the publication, as the EU can recover taxes in illegal support for a period that goes back 10 years. However, an actual number has not been offered by investigators yet.

Meanwhile, Apple says it has done nothing wrong, something it has previously stated in the U.S. when the company appeared before Congress in May 2013.

“There’s never been any special deal, there’s never been anything that would be construed as state aid,” Apple’s CFO Luca Maestri told The Financial Times in an interview, deeming the whole investigation as “very unfortunate.”

“We know that we didn’t do anything that was against the law and we are very confident that through the investigation it will be shown that there was no selective treatment in our favour at any point in time,” Maestri said.

As for the agreements in place with Ireland the EU is referring to, Maestri explained that the company was “simply trying to understand what was the right amount of taxes that we would have to pay in Ireland,” adding that Apple’s approach was “very responsible, transparent and prudent.”

The EU is looking at similar tax-related favorable deals between Starbucks and the Netherlands and Fiat’s financial arm and Luxembourg.

Chris Smith has been covering consumer electronics ever since the iPhone revolutionized the industry in 2008. When he’s not writing about the most recent tech news for BGR, he closely follows the events in Marvel’s Cinematic Universe and other blockbuster franchises. Outside of work, you’ll catch him streaming almost every new movie and TV show release as soon as it's available.