Apple is included on a list of companies that will benefit from a new scheme by the Bank of England which allows the bank to buy bonds — IOUs — from companies, effectively reducing the cost of borrowing, which will benefit Apple's bottom line.
The move raised eyebrows in the City of London, because Apple is one company at the center of a pan-European tax row. Apple does not have its HQ in the UK — one of the normal, but not exclusive, prerequisites for such a Bank of England scheme and it records some of its UK sales in Ireland, avoiding UK tax.
Apple's latest accounts show that it paid just US$17 million in UK corporation tax despite making an estimated US$2.6 billion profit in the country. The news that Apple is set to benefit from the latest Bank of England stimulus scheme will anger critics.
In August, the European Commission decided that Ireland granted undue tax benefits of up to US$14.6 billion to Apple. This is illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. It has ordered Ireland to recover the illegal aid. Both Apple and Ireland are appealing the ruling.
The landmark ruling followed months of investigations into so-called "sweet heart deals" offered by countries such as Ireland, the Netherlands and Luxembourg which offer benign tax regimes that allow companies — particularly multinationals such as Apple, Amazon, Starbucks and Fiat Finance and Trade — to enjoy special tax arrangements to reduce their tax obligations in other countries.
Apple's Chief Executive Tim Cook denied there was a special deal between Apple and the Irish Government and said the deal was "maddening."
"This comes from a political place and has no basis in fact or law," Cook told Irish broadcaster RTE.