Apple risks having to repay Ireland tax rebates worth billions of dollars after the European Union's competition watchdog said Tuesday the company appears to be benefiting from illegal tax deals there. In a preliminary report, the 28-nation bloc's executive Commission said the low tax treatment Ireland is granting Apple counts as state aid and could be illegal under EU law. If the finding is confirmed, Apple could face a huge repayment bill because it funnels the bulk of its international sales through subsidiaries in Ireland. To keep market competition fair, the EU forbids governments from helping individual companies.
The EU is also targeting coffee chain Starbucks and others as part of a crackdown on multinationals exploiting tax loopholes. The EU Commission is now requesting further documents from Ireland before making a legally binding decision on whether the rebate granted to Apple is illegal and must be recouped, wholly or partially. Apple said it had received no selective treatment. "We're subject to the same tax laws as the countless other companies who do business in Ireland," a spokesperson said.