An ongoing European Union investigation into Ireland's tax deal with Apple is about to become a little clearer because documents detailing exactly what the European Commission is looking into are about to be released. The Commission has been questioning the amount Apple pays in taxes in Ireland but until now hasn't clarified specifically what it is investigating.
EU ready to detail what its Ireland tax investigation includes, not levy fines
The event won't be a drama-filled announcement with Apple facing steep fines and millions in back taxes, as the Wall Street Journal suggests. Instead, the announcement will simply outline what is being investigated.
The EU's European Commission launched an investigation into Ireland's tax deals with international companies including Apple in June. The EC investigation was prompted by questions into whether or not Apple, Starbucks, Fiat, and others have been able to avoid paying their fair share of taxes thanks to unfair tax deals.
That investigation, according to some, is about to turn into fines against Apple and other companies, which doesn't fit with the EU's typical procedures. The idea that Apple and other companies could face fines is apparently off-base, too.
"In cases of illegal state aid there never is a fine levied upon the company or recipient of such aid," Tom Worstall said in a Forbes article. "The government that allowed or paid out the aid must recover it, that's true, but there's no fines over and above that even if there's a finding of said illegal aid."
In other words, if the EC finds Ireland's tax policies and deals violate EU law, the country will be responsible for collecting the extra tax each company owes, but there won't be any fines.
EC press officer Joaquin Almunia confirmed the announcement won't include a finding of fact, which puts to rest any question about whether or not Apple and other companies are about to face back tax payments.
The EC's big concern about Apple isn't directly related to tax payments. Instead, the Commission is looking into how Apple moves profits between countries to minimize its tax responsibility. Specifically, the EC wants to know if Apple has been using subsidiary and partner companies to shift profits outside of the UK to countries where its tax burden is lower.
The EC hasn't said exactly when it will release its investigation outline, but has confirmed it will be soon. When that happens, get ready for a laundry list of investigation points, not big fines or past-due tax bills.