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European Commission to rule against Ireland's tax arrangement with Apple: Source

The European Commission will rule against Ireland's tax dealings with Apple on Tuesday, two source familiar with the decision told Reuters, one of whom said Dublin would be told to recoup over 1 billion euros in back taxes.

The Commission declined to comment on Monday.

The European Commission accused Ireland in 2014 of dodging international tax rules by letting Apple shelter profits worth tens of billions of dollars from tax collectors in return for maintaining jobs. Apple and Ireland rejected the accusation and have both said they will appeal any adverse ruling.

The source said the Commission will recommend a figure in back taxes that it expects to be collected but it will be up to Irish authorities to calculate exactly what is owed.

Apple was one of the first U.S. companies relocate much of its earnings in Ireland, allowing the company to pay a much corporate lower tax rate in some years — as low as 2 percent, compared to 35 percent in the U.S.

Apple did not immediately respond to a request for comment.

Irish authorities are prepared for the decision but deny they've done anything wrong.

"We don't believe we gave any state aid to Apple," Eoghan Murphy, junior finance minister, told broadcaster RTE, according to a report in Bloomberg. "It's in the national interest that we defend our international reputation in this regard."

Even though Apple first relocated its overseas operations to Ireland in 1980, the tax arrangement is the result of a meeting between Apple and Irish officials in 1991, which set up the company's tax arrangements with the country until 2007.

This story is developing. Please check back for further updates.

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