Apple might have a tax problem. Though it has the support of the US Treasury, the Cupertino company still faces a probe from the European Commission into whether it underpaid taxes on the part of its business based in Ireland. Reports claim a decision is close, and analysts estimate that a penalty could range from the millions to the billions.
Tied to the issue here is the process by which big US companies use offshore havens to keep their cash overseas and sidestep higher American tax rates. As this chart from Statista shows, Apple is very familiar with the idea: Based on the company’s quarterly filings, it holds nearly $215 billion in foreign subsidiaries, compared to just $16.6 billion in the US.
That might be alarming to the unfamiliar, but it’s important to note that simply using foreign affiliates isn’t why Apple is being probed. In fact, that process, while questionable, is both very common and completely legal. Still, with numbers that big, it’s easy to see why tax practices have become such a prickly issue for Apple over the years.