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The European Commission has concluded its three year investigation into Apple's use of Irish tax loopholes to avoid paying high corporation tax and has ruled that it should pay as much as 13 billion euros (£11 billion) in back taxes. Both Apple and Ireland's government are expected to appeal the ruling.
The investigation into Apple's tax avoidance in Ireland has been a long and arduous one. It began way back in 2013, with the European Commission investigating how it was that Apple was paying less than one per cent corporation tax in the EU, despite earning billions upon billions. It turns out that it had help, from Ireland.
The eventual ruling concluded that Ireland gave Apple illegal tax benefits, allowing it to avoid paying billions in taxes. However with this ruling, the Irish government must now reclaim backtaxes, something it will be unlikely to do happily, since it would mean admitting guilt. Hence why it is expected to appeal the decision alongside Apple.
Although many companies make use of what's known as the Double Irish arrangement (often with a Dutch sandwhich) Apple received special consideration from the Irish government, which is entirely illegal under EU law. Throughout the period of 2003-2014, Apple was able to funnel all European profits through Ireland, claiming all sales as part of its “head office,” there.
Using its special relationship with the Irish government, it then paid next to nothing on its 10s of billions of profits. In 2011 alone, it paid tax on £38 million in profits, but went entirely untaxed on over £13.65 billion. That works out to a corporation tax rate of around 0.05 per cent.
Considering even minimum wage workers must pay 20 per cent on anything they earn over their allowance, that's a figure that's incredibly hard for many people to swallow.
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KitGuru Says: Although it's good to see Apple being forced to pay its dues and for the Irish government to do its job properly, this just shows yet another instance of mega corporations influencing politicians. Google was previously caught out paying just over a hundred million pounds backtaxhat f on a decade of unpaid taxes, despite owing as much as ten times that.
SHAME!!!!
EU bull poop.
Apple employs many thousands of people in Ireland. (Cork and elsewhere)
Apple have been in Ireland sinse the 80’s
I have in the past worked on apple products here in Ireland.
This is an attack by high tax countries like Germany and France on Ireland. They are eyeing our jobs in IT sector. Have no doubt about that. Indeed both countries give tax brakes better than Irelands. EG Toyota and france.
Clearly a reason why Ireland like the UK should leave the EU.
Bullshit. It’s about them paying less than 1% in tax because they get to funnel it through Ireland. It means the rest of the EU, where Apple certainly DOES operate, are being ripped off by Ireland and Apple.
Were they to have paid the proper taxes in Ireland, Ireland would’ve been less appealing to Apple (and others).
The US is all pissed off as well, because it’ll mean Apple are paying less tax in the US since they’re paying more abroad.
It’s honestly about time we just simply had companies pay the correct tax for revenues generated in the country they’re from. Why the hell should Apple, Microsoft and Google get to operate in the UK, rake in billions in profit from the UK, but then pay a pittance because they funnel the money through Ireland, since Ireland has a lower tax rate?
+1
And I’m Irish as well. I wonder which one of our weasel politicians got their pockets lined for that deal.
Amen to that. Countries should not compete on tax rates for companies, because it’s a race to the bottom and in the end it’s the average Joe that has to make up the difference. Certainly Apple, which makes net profits that are beyond ridiculous based on technology that was researched primarily through government subsidies, should make appropriate contributions to society. They have enough reserves to buy a medium sized country at this point.
It’s funny that people want Ireland to leave the EU over this, when the EU saved their economy only a few years ago with a massive bailout. A bailout that was necessary in part because Ireland has such ridiculous low tax rates to attract companies like Apple.
Not that I’d be particularly unhappy if Ireland left the EU; it’s a corrupt pos that does not do the things it should and a lot of things it should not. Rebuilding it from the ground up is the only way to make it work, and countries leaving is the only way to achieve that. But that´s a different discussion.
Shame really, but imo Apple make garbage products with little to longevity and vastly over charge on everything they sell. Fuck ’em, they don’t deserve the money they’ve made
I know, right? If Apple sell £1bn’s worth of stuff to UK customers, they need to pay the UKs corp tax rate. Same goes for the rest of the world.
All these tax agreements were written before threw internet or globalisation and these companies are making billions from that lack of updating tax agreements.
It’s an impressive number, but this is pre-negotiations.
Here here!
This is the whole reason why the EU sought to mandate similar levels of corporate taxation across it’s member states, of which Ireland is a card carrying member. To stop countries in the block from undercutting each other and making themselves in to a tax haven that enables companies to avoid paying their share (no, me getting taxed for the work I do is not a company’s fair share).
Ireland are in breach of the tax requirements that they signed up to by being part of the EU, it doesn’t matter what they want or not if they’re ignoring their obligations. They get the money, they tax the right amount and the fallout from that is no one’s fault but their own.
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