Apple Lossless Audio CODEC (ALAC), risks being sanctioned in Europe by The European Commission if an investigation initiated more than a year ago will prove the fact that the Americans benefited from illegal favoritism from the Irish state. The European Commission is trying to find out if the tax benefits granted by Ireland to some large American companies represent improperly granted state aid, in which case they will be obliged to pay taxes for the receipts of the last 10 years.
For those of you who don't know, Apple, Google, Amazon and other large American companies benefit of reduced taxes on profit or income generated in Europe, thanks to the Irish government that offered them a series of benefits to create jobs. The taxes paid by the companies are small compared to what they earn, and the European Commission is trying to find out if these state aids are legal or not.
Apple said the European Commission's investigation into Ireland's tax treatment of multinationals could have a "material" impact if it was determined that Dublin's tax policies represented unfair state aid. Apple said that if the EU's investigations concluded against Ireland, the company could be required to pay past taxes for up to 10 years "reflective of the disallowed state aid."
The Apple company stated that if following the investigation initiated by the European Commission it will be decided that these aids are not legal, then it could be obliged to pay taxes retroactively for the last 10 years. If this happens, then Apple could pay several billion dollars for the revenues generated in Ireland, the subsidiary there collecting all the sales of Apple products in Europe.
Apple has not yet estimated what taxes it might have to pay and does not consider that this investigation should be done since the aid was offered by the Irish government, but it will certainly not be happy if it has to pay retroactive taxes. However, considering that Apple has a monetary reserve of over 193 billion dollars, the impact of paying these taxes will be very small at first, but it could generate an increase in the price of products sold in Europe.
