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The EU could hit Apple with a $19 billion tax bill next week

Aug 27, 2016, 15:03 IST

Apple CEO Tim Cook speaks during an Apple special event at the Apple headquarters on March 21, 2016 in Cupertino, California. The company is expected to update its iPhone and iPad lines, and introduce new bands for the Apple Watch.Justin Sullivan/Getty Images

The US and the European Union are gearing up for an epic showdown over Apple's tax bill - and it could happen as soon as next week.

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The Financial Times reports that the European Commission is expected to rule next week in a three-year-long inquiry looking into Apple's tax arrangements with Ireland.

At stake is whether the deal Ireland struck with Apple amounts to "state aid," and is therefore illegal. Should the Commission rule against Ireland - which is what the FT reports is likely to happen - then Apple could face a tax bill in the billions.

The exact amount is up in the air - though JP Morgan estimates it could be as much as a whopping $19 billion.

The Obama administration is watching the case with concern, and has warned the Commission of potential consequences if it rules against Apple and Ireland.

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The US Treasury said in a white paper published on Wednesday that it "continues to consider potential responses should the Commission continue its present course," and accused the Brussels investigation of being "supranational."

Apple and Ireland deny any wrongdoing, and are expected to appeal if hit with a negative ruling. Apple did not immediately respond to a request for comment.

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