Apple warned on Tuesday that it may be forced to pay tax to Ireland on up to 10 years of profits if the European Commission issues an adverse finding following its current investigation of Irish tax rulings that were issued to the American tech giant.
Apple on Monday posted quarterly revenue of $58bn and quarterly net profit of $13.6bn, or $2.33 per diluted share.
In its regular 10-Q filing with the Securities and Exchange Commission, Apple said:
The Wall Street Journal says that the SEC doesn't have a clear rule on what makes something “material.” Some securities lawyers consider it to be 5% of average annual pretax profits for the past three years; others define “material” as anything that an investor may want to know — this could exceed $2.5bn, according to FT calculations.
This month the Australian Parliament has been holding hearings on Apple Australia's tax situation.
The Sydney Morning Herald reported that Antony Ting, an associate professor of taxation law at Sydney University, said Apple's international tax structure is much like its products — relatively simple compared to its competitors'.
"From the iMac in 1998 and the iPod in 2001 to the more recent iPhone in 2007 and iPad in 2010, they often set the standard for the product category," Ting wrote in a paper called iTax Apple's International Tax Structure and the Double Non-Taxation Issue.
"In the tax world, Apple has also proved to be equally creative and bold. An unusual feature of its tax structure is its relative simplicity: it does not rely on the Double Irish Dutch Sandwich structure that has been commonly used by other US multinationals. Nevertheless, it is highly effective in achieving the goal of tax avoidance.
"From 2009 to 2012, Apple's international tax structure successfully sheltered $US44bn from taxation anywhere in the world [including from sales generated in Australia]."
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