Apple (NASDAQ:AAPL) Once Again Under the Microscope over Legal Issues

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By Ross Schwartz on September 30, 2014 Us News

After being a part of all sort of controversies, be it in terms of edited advertisements, dealing with competition, errors in product development or PR. This time around Apple (NASDAQ:AAPL) is accused of not paying taxes, which would have legal implications. As the Financial Times and Wall Street puts it Apple (NASDAQ:AAPL) has been accused of shielding its revenues in Ireland as well as avoiding tax payment for as much as $9 million per year within international jurisdictions.

Apparently, sources reveal that Apple (NASDAQ:AAPL) signed a deal with Ireland, which calls for tax payment of 2%. But European commission has already labeled the agreement as illegal. And the Company now is under investigation along with other Big American names like Amazon (NASDAQ:AMZN) and Starbucks (NASDAQ:SBUX) for manipulating the law to protect themselves against tax payment. The Financial Times has shed light on a deal made between Apple (NASDAQ:AAPL) and the Irish Government, claiming lower tax rates in exchange of 4000 jobs in the country. The commission will investigate if Apple (NASDAQ:AAPL) was really receiving such favors from the Irish government as it would be considered illegal to favor a few firms over others.

Luca Maestri, Apple (NASDAQ:AAPL)’s Chief Financial Officer stood his ground as he dismissed all these allegations as fake stories, claiming Apple (NASDAQ:AAPL) never made any special deal with any state. In an interview Maestri called the situation very unfortunate and commented that Apple (NASDAQ:AAPL), being the world’s most valuable company doesn’t need to make such agreements with any country. Apple has a reputation to maintain as one of the most popular firms in the world and such petty issues are brought up to damage its reputation.

Maestri further emphasized that Apple (NASDAQ:AAPL) has done nothing wrong and very soon the investigation will reveal that. He said that there have been no favors given to the company from Ireland. Luca Maestri, Apple (NASDAQ:AAPL) simply followed the country laws, ever since its presence in the country, which is of 35 years or so.

Apple (NASDAQ:AAPL) explains that this investigation is unfair because it will undo past years of tax payments in accordance to a law that only surfaced in 2010 and is yet to be implemented in Ireland.

To date, Apple (NASDAQ:AAPL) assets are shown worth $223 billion, a large amount of which is in cash or some sort of market securities. Apple (NASDAQ:AAPL) in the past has requested “tax holiday” from the US Government, which allows it to dismiss $150 billion worth in taxes.

The investigators, analysts and journalists have their eyes fixed on Apple (NASDAQ:AAPL), as the story unfolds. No doubt the results of this investigation could both damage or maintain Apple (NASDAQ:AAPL)’s image in the consumer’s eyes.

But the question arises, is this all a propaganda to bring Apple (NASDAQ:AAPL) down or has Apple (NASDAQ:AAPL) really being sheltering its taxes in different parts of the world. Whatever the case might be, it shall be out in the open soon enough. The result of this investigation may or may not have any impact on the company’s stock value.