Apple Under More Pressure Over Irish Tax Policies
Published on: 8th Mar 2014
Note -- this news article is more than a year old.
By: Ian Mansfield
Apple and the Irish government are coming under pressure to explain an exceptionally low undisclosed tax rate that the computer giant is paying in the country.
According to accounts obtained by the Irish Times newspaper, Apple paid an unexplained lower rate of tax on revenues between 2004-8 which reduced its tax bill by more than USD850 million.
The Irish holding company, Apple Sales International (ASI) provides services for Apple offices around the world and between 2004-8 recorded revenues of US$29 billion and net profit of USD7.1 billion.
However, the expected tax bill on those profits of USD890 million, actually came to just USD36 million.
It is not clear how the company was able to secure such a low tax bill, as the accounts seen by the newspaper do not explain why the expected, already low rate of 12.5% was not paid.
Apple has already been criticized for setting up holding companies in Ireland to avoid paying higher sales taxes in other countries, but now appears to have found a way of avoiding the bulk of the Irish tax as well.
If Apple is paying such a minimal amount, it will raise pressure on the Irish government as it has long argued that its lower tax rates encourages investment, and generates more revenue for the government.
With Ireland coming under fire over its aggressively low tax rates from other European governments, it may have to ask if a paltry USD36 million in taxes from Apple over 4 years is worth the hassle.
At a recent US hearing into Apple's tax affairs, the company was described as being almost "stateless" in how its accounts routed money around the world to avoid paying taxes.
The stateless loophole was closed by the Irish government last October.
On the web: The Irish Times