Apple has long insisted that it isn’t breaking any laws by keeping billions in profits in Irish accounts. CEO Tim Cook has said Apple refuses to “repatriate” the profits to the U.S. because the 35% U.S. tax rate is too high. In Ireland, Apple is said to pay less than 2% on its profits as part of a special arrangement with the Irish government (normal corporate tax rate in the Emerald Isle is 12.5%).
After a three-year investigation, the European Commission will rule tomorrow that that sweetheart deal amounts to Apple receiving illegal state aid from Ireland, reports the Financial Times (pay wall). The EU will order the Irish government to collect $1.1 billion in back taxes, the report states.
The decision was expected in September or October, but EU competition commissioner fast-tracked the announcement of the 130-page judgement to avoid leaks. Apple has said it will appeal a negative decision, but it may have limited leverage to reverse the EU’s course.