The European Union boldly accused Ireland of providing Apple Inc. (NASDAQ:AAPL) with questionable financial aid

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By Chris Hillman on September 30, 2014 Company

The EU (European Union) has said that Ireland has provided Apple Inc. (NASDAQ:AAPL) with government financial aid, by allowing the makers of the new iPhone 6 to shelter tens of billions of American dollars from being taxed, in return for jobs.

The European Union Commission has pointed out, and cited the minutes of several meetings between the tax officials of Ireland and a representative from the makers of the iPad and the iPhones, that the tax treatment that Ireland has offered to Apple Inc. (NASDAQ:AAPL) ,was motivated by the employment considerations.

If this accusation can be proven, that means that Ireland will have to attempt to get back taxes from Apple Inc. (NASDAQ:AAPL).

Under the rules and guidelines outlined by the European Union, if the amount of withheld taxes has reached an illegal amount, the company in question would be forced to pay the monies to the Irish government.

However, according to academics and professional tax advisors, it is more likely than not, that the Irish government would strongly be advised to be less accommodating, when it comes to multinationals deals.

Joaquin Almunia, the European Competition Commissioner, has stated, to the government of Dublin, that tax deals that were agreed upon in1991 and 2007 appear to have broken the European Union laws.

The Commissioner, also took note, that the tax agreement of 1991 between the Irish government and Apple Inc. (NASDAQ:AAPL) has been in place for sixteen years, which far exceeds the five year limit, that is usually put in place for financial transactions and related tax reduction issues.

Apple Inc. (NASDAQ:AAPL) does not believe that they received selective or special treatment from the Irish government, and the Finance Department of Ireland said, that it stayed with the guidelines of the law and did not breach any state aid rules.

According to analysts, this type of arrangement has saved Apple Inc. (NASDAQ:AAPL) and companies like them, billions of dollars in taxes every year.

Apple Inc. (NASDAQ:AAPL) employs more than 4000 individuals at a facility in South West Ireland, the only manufacturing plant that is currently out of the United States of America.

It seems that Apple Inc. (NASDAQ:AAPL) is not the only company that is under scrutiny, for avoiding to pay their fair share of taxes. Starbucks Corporation (NASDAQ:SBUX), the coffee chain, has also caught the eye of the European Union, and is currently under investigation as well as Fiat, the Italian maker of automobiles.

It is complex, but it seems that Apple Inc. has the legal right to exploit the intellectual property in Asia, Africa and Europe, two Irish subsidiaries that are not registered to pay taxes in any country. This information was revealed last year, when a United States Senate investigation was conducted.

Now the EU (European Commission) has questions regarding this Irish tax ruling, that allows ASI and AOE to declare an annual profit (that is taxable) of no more than 80 million euros.

Apple Inc. (NASDAQ:AAPL) opened today at 100.81 and by 10:30 am EDT, it was hovering at 101.15. The market cap is 605.49 B and the 52 week forecast is 67.77 – 6o 103.75 with 62% inst. ownership.