EU targets Apple's overseas tax model, says Ireland appears to grant firm illegal rebate

MarketsAssociated Press

The European Union's competition watchdog says tax rebates that Ireland granted iPhone maker Apple appear to amount to illegal state aid and may have to be recouped.

Apple Inc. funnels the bulk of its international sales through subsidiaries in Ireland, where it benefits from low, negotiated tax deals.

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In a letter to the Irish government published Tuesday, the 28-nation bloc's executive Commission said the tax treatment granted to Apple raises "doubts about the compatibility" with EU law.

The Commission says tax deals struck with Apple in 1991 and then 2007 show "several inconsistencies" and may not comply with international taxation standards.

The EU first announced the probe in June. It's now requesting further documents from Ireland before making a decision, which is likely to take several months.