Apple could owe $8 billion for its overseas cash pile

The world’s largest company could owe more than $8 billion (roughly Rs. 54,232 crores) in back taxes as a result of a European Commission investigation into its tax policies, according to an analysis by Matt Larson of Bloomberg Intelligence.

It may be noted that Apple is not the only multinational to have its European tax affairs scrutinized by EU antitrust regulators. A decision in the probe is expected in Brussels by March, possibly after the 2016 Irish election. Bloomberg reports that Apple plans to appeal any ruling not in its favor.

Apple uses low operating costs, to calculate its tax liability which drastically cuts down the amount it pays to the Irish government.

Apple is perhaps the highest-profile case of United States companies facing scrutiny from officials in Europe.

The company is among a list of others, including Starbucks Corp., Amazon Corp., and McDonalds Corp., that are being investigated for its tax policies.

Tough to pinpoint the exact companies that will be impacted given disclosure, but we provide a couple of quick steps investors can use to find companies that HOLT identifies with the most risk. Last month Apple agreed to pay 8 million for tax evasion in Italy without having to admit to it. Will Apple take a similar approach to negotiations with the European Commission?

“Going back in time to penalize taxpayers under a new law, or a new interpretation of an existing law without notice, runs counter to that objective”.

Apple-in its financial statement for 2015’s fiscal year-litigated strongly against the scrutiny of its taxes as a threat to its investment volumes. Apple generates around 55% of its revenue outside the U.S., and pays 1.8% in foreign tax rates. The company also said that a change to the tax rates applied to it would drastically affect its operating results, cash flows, and financial condition. In a recent 60-minutes interview on “Apple Insider”, the CEO has said that the allegation of tax evasion on the company is a “total political crap”.

Kristin Huguet, a spokeswoman for Apple, declined to comment.

For now, Apple will continue to play by its own rules until the European Commission and the U.S. IRS decide to clamp down on Apple which could as early as this spring.