“Apple has warned investors that it could face ‘material’ financial penalties from the European Commission’s investigation into its tax deals with Ireland — the first time it has disclosed the potential consequences of the probe,” Tim Bradshaw and Christian Oliver report for The Financial Times. “The warning came in Apple’s regular 10-Q filing.”
“Under US securities rules, a material event is usually defined as 5 per cent of a company’s average pre-tax earnings for the past three years,” Bradshaw and Oliver report. “For Apple, which reported the highest quarterly profit ever for a US company in January, that could exceed $2.5bn, according to FT calculations.”
“Apple said in the filing: ‘If the European Commission were to conclude against Ireland, it could require Ireland to recover from the company past taxes covering a period of up to 10 years reflective of the disallowed state aid, and such amount could be material,'” Bradshaw and Oliver report. “Apple did not have any further comment on its filings, but in an interview last year Apple finance chief Luca Maestri told the FT: ‘It’s very important that people understand that there was no special deal that we cut with Ireland. We simply followed the laws in the country over the 35 years that we have been in Ireland.'”
Read more in the full article here.
MacDailyNews Take: Apple has repeatedly and confidently stated that they didn’t do anything that was against the law. Therefore, unless the EC tries to change the law retroactively, if that’s even possible, or tries to collect taxes retroactively in some other fashion, Apple is in the clear. By U.S. law, companies have to warn investors of potential material events in the 10-Q.
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