Ireland Readies Legislation to Close Apple’s Tax Loophole

tim cook

The SEC has officially closed the file claiming Apple has sought the “Holy Grail of tax avoidance”, but the hearings have heavily affected Ireland’s reputation – especially in terms of the “tax haven” label used by Senators John McCain and Carl Levin. As a result, the country has decided to close the legal loophole that saved Apple tax on its $44 billion offshore income.

According to the Financial Times, Reuters and The Street, Ireland’s finance minister, Michael Nooman, says new legislation will be published that will ensure that companies registered in Ireland won’t be considered “stateless” in terms of their tax residency. The new legislation will force “stateless” companies incorporated in Ireland to declare tax residency in some other country, or pay the country’s usual 12.5% corporate tax rate in 2015.

“Let me be crystal clear, Ireland wants to be part of the solution to this global tax challenge, not part of the problem,” Michael Nooman told parliament in his budget speech. “I want Ireland to play fair – as we always have done – and I want Ireland to play to win.”

Ireland faced allegations that it had allowed the Cupertino-based company to apply a corporation tax of 2% or less, when its usual tax rate is 12.5%. Ireland rejected the criticism, but as Nooman points out, the Apple hearings have affected the country’s reputation.

Tax advisers immediately reacted to the news:

Under this tax structure, companies such as Google and Adobe exploit differences between the US and Irish tax codes to move profits to low tax jurisdictions. An international tax adviser said last night that Apple and other companies were unlikely to lose out significantly as they could shift to a “Double Irish” tax structure.

Ireland currently faces tremendous international pressure: Brussels decided to probe the tax relationship between Ireland, the Netherlands, and Luxembourg, and even some international companies.

Technology enthusiast, rocker, biker and writer of iPhoneinCanada.ca. Follow me on Twitter or contact me via email: istvan@iphoneincanada.ca

  • Farids

    12.5%??!! I’m closing shop and moving there!!! Even at 12.5 percent, it’s 2.5 times less than what I pay here!!!

  • Do it up!

  • Chrome262

    its a corporate tax not personal income. But yeah that is low even for that. not thinking Apple is worried. What is a double Irish tax structure?

  • Farids

    I know it’s corporate tax. Even after expenses and with a good accountant, I loose between 25-35%. The juicy tax breaks start around 100k above my income. The big guys get the best breaks 🙂

  • Chrome262

    what is a double Irish, and don’t say its a sexual position lol?