The European Commission will accuse Apple of benefiting from illicit state aid in Ireland, based on preliminary findings of an investigation into tax deals.
The news was confirmed by the Financial Times, citing people familiar with the matter.
Details of the probe, which will be released later this week, could leave the Cupertino-based company with billions of euros in fines.
The Irish government said it was confident that it has not breached state aid rules, and plans to defend its position "vigorously," FT reported.
The European Commission, the European Union's competition authority, is also investigating tax deals in the Netherlands, Luxembourg, as well as Ireland, after tax-planning practices of major corporations like Apple, Google, and Starbucks were revealed.
"Ireland is confident that there is no breach of state aid rules in this case and has already issued a formal response to the Commission earlier this month, addressing in detail the concerns and some misunderstandings contained in the opening decision," Ireland's Department of Finance said, according to the BBC News.
A U.S. Senate committee investigation said in 2013 that Apple cut billions from its tax bill by declaring companies registered in the Irish city of Cork as not tax resident in any country, according to FT.
Ireland, the Netherlands and Luxembourg all have specially structured corporate tax arrangements, but so do other EU member states.
Apple denies that it ever agreed to any special tax arrangements with Dublin, and pays all the tax it owes.
"There's never been anything that would be construed as state aid," Apple's chief financial officer, Luca Maestri, told the Financial Times newspaper.
Back in June, when the Commission said it would be conducting in-depth investigations into Fiat's tax affairs in Luxembourg, Starbucks' in the Netherlands and Apple's in Ireland, Joaquin Almunia, vice-president for competition policy, said state aid rules should be applied to taxation.
"Under the EU's state aid rules, national authorities cannot take measures allowing certain companies to pay less tax than they should if the tax rules of the member state were applied in a fair and non-discriminatory way," he said.
The outline of the case against Ireland's tax policy towards Apple would be made public this week.
"The decision will set out the Commission's reasons for opening an in-depth investigation," said Commission spokesman Antoine Columbani.
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