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APPLE HAS WARNED it could be made to pay a decade of extra taxes for Ireland potentially taking a billion-dollar bite out of its bottom line.
The world’s biggest public company, which this week announced a booming $58 billion in sales for the first three months of 2015, said the financial hit would come if European officials slapped it with a negative ruling for its tax dealings in the Republic.
In its latest company filing, Apple said it believed the European Commission’s allegations were “without merit” – but if findings went against it and the Irish government that could lead to a significant tax bill.
“If the European Commission were to conclude against Ireland, the European Commission could require Ireland to recover from the company past taxes covering a period of up to 10 years reflective of the disallowed state aid,” it said.
While such amount could be material, as of March 28, 2015 the company is unable to estimate the impact.”
A material event
The Financial Times reported a “material event” under US securities rules was usually considered anything that could cost the company 5% of its average earnings over the past three years – a figure potentially worth over $2.5 billion (€2.2 billion).
The European Commission is looking at whether Apple got a sweetheart tax deal in Ireland over a period spanning from 1991 to 2007. It has already made preliminary findings that Irish officials gave Apple a “selective” advantage in its tax dealings.
Both the US tech giant and Ireland deny any wrongdoing, with Finance Minister Michael Noonan claiming the case against it was “weak” and adding it would use all legal options to fight an adverse finding. Apple has said it simply followed Irish tax rules.
The case centres on the tax dealings of two Irish-registered Apple offshoots, Apple Sales International (ASI) and Apple Operations Europe.
Figures from 2012 showed ASI booked revenues of $63.9 billion, but Irish officials agreed to set its taxable income at between €50 and €60 million – roughly 0.1% of the total – as the amount that represented its local operations.
Authorities in the Republic didn’t make clear in which country either of the two companies was officially tax resident, which meant it was unknown how much tax – if any – the subsidiaries paid on their billions in revenue.
In last year’s budget, Noonan announced the government was phasing out the controversial “double Irish” loophole which allowed companies to be registered in Ireland but pay tax offshore.
That arrangement made it possible for firms to siphon profits into tax havens like Bermuda without breaking any laws.
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This would be funny if it wasn’t so serious! The eu are saying that Apple owes billions in taxes to Ireland, but the government of Ireland are fighting the case. Wow
What do you expect from a corrupt government?
Says it all, really, yet some people are probably still going to vote for these criminal morons again.
FG don’t care about you or me.
They’re fighting it because such a ruling could negatively impact our ability to draw in large multinational companies.
Are you people willfully ignorant or is it just stupidity?
And you think these foreign companies will stay in Ireland if we force them to pay more tax. Something is better than nothing.
If these multinationals left, the people above would all be complaining about the rising unemployment rate.
Keep telling yourself that live in your fools paradise ! Support the corrupt GOOD LUCK
Johnny & Paul: Your devotion blinds you. “Shh.. They’re only lying to everybody because they have our best interests at heart”
Yea Brigid, could you try writing something a little more intelligible next time?
Conn Rogers. You’re not addressing our point. Do you think it would be wise for a country as small as Ireland to try and strong-arm multinational corporations? The same corporations that employ so many people? The same corporations that create employment elsewhere by purchasing goods and services from Irish businesses?
What world are you living in?
Johnny, I’ve asked you before to sign in under your real name if you want to discuss anything. Anonymous accounts are far too prone to reckless mud-slinging at anyone and everyone who doesn’t agree with them and that makes it very difficult to have real conversations.
“Johnny, I’ve asked you before to sign in under your real name if you want to discuss anything. ”
You require my full name to debate with me on issues relating to Irish economic policy? I’m sorry, but that’s a cop out if I ever saw one.
Run along now.
Paul you sound like a battered housewife , a sure he’s grand until he has a drink .
Conn, can you answer me please, why would the multinationals stay in Ireland if we forced them to pay more tax???? Surely offering them a low cost base is the attraction of coming to our peripheral location.
@John Byrne: That analogy would work if Ireland was negatively impacted by Apple’s presence… which we aren’t. We have only gained.
John, intellectual debating is clearly not your strong point.
If you have courage of conviction, what’s wrong with standing over what you say? You can’t do that with a fake name and picture. The fact that you even set up an account like that indicates you’re gonna shoot fast and loose and the comments of yours that I’ve read so far back that up.
I’ll touch on the point for a second anyway… I don’t think it’s unreasonable to ask for what’s a decent rate at 12.5%. Surely that’s what drew them here in the first place anyway? Or did they come in full knowledge that they wouldn’t even have to pay that?? If so, who assured them of that??
Sorry Paul, I suppose that last bit should have been addressed to you
“This would be funny if it wasn’t so serious! The eu are saying that Apple owes billions in taxes to Ireland, but the government of Ireland are fighting the case. Wow”
The government are fighting on behalf of one of the fattest multinational’s in the Globe continuing to pay derisory tax in Ireland,
And the people are fighting the government’s case in Europe (with their bare hands) -the “off the books” ripping off of their impoverished citizens, to the tune of billions in future years; to raise funds to fix the water infrastructure.!
If Apple are made to pay proper taxes (and every citizen prays that they will be.!) and the government get a billion dollar windfall-do you think it will be given to Irish Water.?
Not a hope in Hell-it will be spent in buying enough votes (farmers, public service Unions etc) to get them re-elected.!
I agree Conn, now calculate 12.5% of the profits Apple earned in Ireland.
Oddly the article did not give us this figure. But you will find Apple paid what’s due.
Conn… Sorry for caring about my own personal privacy. You’d have to be as thick as sh*t to publish your political opinions online… with your name right beside them.
Paul we get less than crumbs from apples table while they funnel obscene profits through Ireland , products made in China for nothing and administered through Ireland and you’re happy with that are you ? You’re pathetic .
Why is that johnny , afraid to back up your bullsh!t .
Sick of apple money. Samsung back-taxes are way better.
John, ring Apple HQ in Cupertino and tell them that. Tell them they should funnel their profits through the Bahamas or Dubai, where they will pay little to no tax. At the end of the day they don’t owe us any favours.
Maybe you’re right, Paul… if that’s the case, then I don’t know why there’s an article or any discussion going on about this at all as it’s all just business as usual!?
Johnny, I care about my privacy too. I realise my facebook page gives too much info about me away already but that’s the price I pay to stand over what I say. I don’t have any other accounts (I do actually have a Twitter one that I set up a couple of years ago, which doesn’t use my real name but I choose not to use it here. In case it every happens by accident… it’s rojman81… that’s me. I don’t mind telling you that because my intentions here are all above board. If someone wants to target me for my political opinions, there’s not a lot i can do about it and will just have to cross the bridge when/if i come to it… but, to be honest, i think an opinion expressed by a faceless and nameless account that could be run by the exact same person as any of the other faceless/nameless accounts (look at Baz/Patjoejoe/etc) carries less weight than one by anyone who chooses not to wear a proverbial balaclava
Ireland is-in terms of their “tax haven” policy towards multinationals-sucking in abnormally high amounts of jobs, and investment;- the equivalent of a hostile offshore aircraft carrier, threatening employment opportunities for all other European nations in the EU.
Time the EU put a stop to it.!
sorry about the typos there
As I said in my first comment Paul , you are happy with being abused because you get something which in your opinion is better than nothing . History is littered with people with your attitude , not too many people remember the Paul careys of the world however . On the other hand we do tend to celebrate the ones who took a stand against corrupt governments and entities etc . The word traitor springs to mind . So carry on and enjoy your pat on the head .
So John, tell us how you would attract 200,000 direct and indirect jobs to Ireland without using tax as an incentive. I await with bated breath.
Also, Johnny, I think the main reason you don’t use your real name here is so you can feel untouchable throwing cr@p like this around without even bothering to try and discuss anything with one: “Are you people willfully ignorant or is it just stupidity?”
That’s exactly why anonymous opinions count for nothing
Really Paul 200,000 jobs in Ireland , and where exactly did you pull that number out of ?
I agree. They were up in arms when Dell shut their manufacturing down saying the government didn’t do enough to keep them.
The job losses in Limerick from closures of ancillary businesses were unbelievable
Paul, if you think corruption and lies are the only way to attract business here, then you just don’t think much of Ireland. I think one big draw could be if we ever put a competent government in place, who want to run the country as best they can for everybody who lives and works in it… it might become a better place in which to live and work.
John. 100,000 direct FDI jobs in Ireland supporting another 100,000 indirectly. Have you some other figures?
I notice you didn’t answer my question. Is that because you can’t?
Paul , what you are talking about is trickle down economics which in the last three decades has been proven to be complete rubbish .
Under the current economic and FDI structure we would struggle if the tax “incentives” were removed. We would have no hope with some companies if the tax non residency issue was regularised over night.
The government are playing the game the only way they can; we’ve done nothing wrong, tax paid for services outside Ireland are not our problem, we’ll take the back tax if we get it.
The big issue here is that “incentives” play a much bigger role in other countries, thus hiding the actual tax take from large corporations, hence both issues must be dealt with concurrently; then you’re into European tax laws, something citizens won’t stomach.
My preferred solution would be to get rid of “incentives” and “double Irish” across Europe and recoup the 10yrs missed tax but only allow governments to use the money to pay off national debt.
So John… we are all as financially similar now in 2015 as we were in 1985? Yeah right.
I’m working in IT here for the last 15 years. In that time I’ve earned over a million euro and paid hefty tax on all of that income. I’ve worked for 6 different companies, all were large American IT / Finance related. Without their presence here I would have emigrated after my masters. These companies employ 100,000 directly. Those 100,000 people are employed and pay taxes here and spend here. Remove those jobs and where do we all work? On the farm?
Get out of that AA your common sense is not welcome here. I don’t understand stuff so I say things like fat cats, criminals and Denis O’Brien, loud noises exaggeration, hyperbole !!!
Here bloody here. This is the point. Not the other rubbish being posted on this arrival. I would care if apple or hole or Intel paid any tax. The revenue from having them here is greater than if they weren’t.
That’s why the Germans & French are trying to feck us for it.
Conn your wrong and being a dick stick to the topic. They can call themselves what ever they want. From real name & address
Ah feck john & conn just meet outside the nearest pub and have a scrap while yes debate
Totally wasting the point of this artical
Exactly AA, & the other 50% you spend locally!
I reckon you managed to save less than 24%.
So, nay Sayers. AA is just one.
Paid 400-480k in tax so people can protest water charges and not work, 160k pissed against the wall or on family. & 200k plus propping up the banks. The rest is misc.
But all of it is in IRELAND not the EU or some crap offshore tax haven. Seriously kids look up from the tofu & vote no leaflets and see some bloody sense. Or are you too busy counting your dole
“A company is an individual in the eyes of the law ” – should the officials who made these deals loose their jobs and benefits if found to have been illegal in their actions ?
Community Service perhaps ? – doing the community a service like removing themselves from the community – or jail as we used to call it – not the bankers community service mind -
Does anyone know if they did it yet and where – public knowledge and all that – check out their travails for the billions that seem to have left the island ..
How can it idiots not like Paul’s comment?
r keane… Is it lonely up there on your pedestal? I don’t claim a penny off the state. I’m just about managing to support myself with a 9-5 and evening work when I can get it but don’t let that get in the way of your random vitriol.
I just take issue with our bullsh!tting bunch of self-serving, overpaid, underachieving and always-deceiving government, who deal in fear and lies, smoke and mirrors, back-slaps and brown envelopes. That might be what you’re looking for in your leaders but not me and I make no apologies for it.
For the articLE at hand here… It’s a reasonable request that an already-lenient tax law be adhered to.
According to Noonan the case against Apple and Ireland is weak……
Of course it is. They’ll offer Mickey Noonan a couple of mil and a lifetime supply of pink shnacks and he’ll tell us how wonderful he is all over again.
What is the point in in telling us what the revenue figure is without giving us the profit figure. Tax is calculated on profit not revenue. The way the article is written is misleading.
“According to Noonan the case against Apple and Ireland is weak……”
Can we start an online petition to send to the Europe Parliament, to help them make the correct decision.?
After all Apple would probably be located somewhere else in the EU if Ireland had not facilitated their tax avoidance.?
1st valid point you ever made Paul.
@Paul Carey Taxable income is profit that has been adjusted for accounting purposes – so the figure is in the article. I’ve just spared people the long-winded explanation for the terminology. You can read all the details here if you’re interested: http://ec.europa.eu/competition/state_aid/cases/253200/253200_1582634_87_2.pdf
Let’s crack open the champagne…..oh wait we won’t see a penny!!
Yeah we will. We’ll see every penny, right before the gov. puts it all into a brown paper bag and hands it back to them.
Noonan will use the Irish citizens money to fight hard against a ruling that could fund all our housing/homeless and disability/disadvantaged social issues.
The ruling is a legacy issue that will not effect Apple operations or have any ongoing negative implications.
Why?
And to stop almost 5,000 jlining the unemployment queue….
Let’s get to the core of the issue.
If only Revenue gave the same consideration to ordinary Irish businesses.
And when will the EU be rigorously investigating the sweetheart tax deals other European nations provided to companies; France for example?
Windfall?
Hey Bono!
Apple need your help!!
Any chance you’d organise an aul gig for them, to help them with the aul Tax Bill, like.
Jayzez, I can’t take many more of these hard luck stories …
Good!
The multinationals are using our infrastructure our people, why should these people-shareholders not be subject to tax? The multinationals are playing games with sovereign governments which directly translates to bribery and corruption.
It is the bottom line that counts for these companies. They demand low tax, business friendly environment (low wage economy, government subsidies, no unions etc), as soon as they find a better option they’re gone. This government need to stop groveling to wall street and start investing in indigenous industry.
Apple has warned? What’s the warning exactly?
Profit warning, or in this case a warning about the potential for fines which would affect profitability and share price.
Something you have to do when you’re a public limited company to prevent major shareholders quietly selling stock before a drop based on their inside knowledge.
They changed it to Apple is worried.
At last the falling Apple can feel the force of gravity, this deserves a bank holiday.
I will question the independence of European Commission if they rule against Apple.
They made a profit of 13 billion last quarter. They can well afford it and we could well do with the funds!! It’s regarding their ‘special deal’ with Ireland. Other multinationals didn’t have a ‘special deal’ so no risk of them leaving. It sickens me that the government don’t want this money!!
Keith, they feel they don’t need the money. As they have their cash cow. US.
Keith they all have “special consideration”‘when they do a deal with Ida. The more jobs & net return to go they create the better the conditions.
Forgot to mention. Just think of the income generate from $100bn turnover in currency transactions passing thorough their Irish bank account?
That’s just one company. Seriously this is a no brainier. Do everything to keep them.
In a spring statement by Enda regarding apple, he responded..ah sure they are grand!
Never going to happen…..dream on
We need a Leaving Town Tax in case Apple et all decide to do a runner
where will they “run” to? higher taxed countries?
The fact the Irish Government is rejecting a potential windfall of billions to the Irish state shows they are failing to act in the national interest. No wonder these guys have never won a second term in office since the foundation of the state.
Corrupt government. Remove them with mass nonpayment and a no vote in endas referendums. It will force a GE,guaranteed.
Where is the corruption here in this case ?
And just like that with a magic wand if Apple back pays 10 years of taxes we will be out of debt paying the anglo debt. Boy it feels good to dream!
apple employs 4000 people directly and another 2500 indirectly in Cork. Enough said.
That doesn’t excuse Apple from paying their fair share like everyone else.
Pity Ireland can’t/wont work with EUpartners to make sure these corporations pay a fair share of tax instead of facilitating global grand larceny. Shamefu
No such thing Bobby. Great idea, but the only reason there’s an issue is because they are not in Germany or France because they refuse to use English as first language.
Watch the Greeks, Portuguese, or Spanish, they’d change their constitution to get the likes of Apple, Google or Intel
So its a race to the bottom.All these massive multinationals must be taxed at a global/regional level maybe via a world parliament but because of the temporary economic uptick (fueled by money printing) this issue will be put on the back burner again..FineGael could have done a little good in this respect by supporting the financial transactions tax but were too short sighted…
The EU is good at playing the bad guy for our benefit. If Ireland voluntarily revoked the sweetheart deal, Apple would threaten to pull out, and the government would take the easy way out. But if Ireland fights to the last instance, and the Commission and the ECJ still order to us to revoke it and claim back tax, our hands are tied and such threats mean nothing. We’ve proven our pro-MNC credentials, and get a wad of cash in the process to spend on improving public services or to pay off part of the national debt. Apple also isn’t likely to pull out of the country over it. All EU countries have rules against state aid, so there is a certain amount of safety in numbers.
It wouldn’t surprise me if the government is secretly delighted with this – it’s a win win situation. None of this addresses the morality involved in attracting MNCs with tax loopholes, of course. That is a completely different issue all together…
Questions need to be raised on why the FF Gov’t introduced such policy. The loopholes are what has starved this state of billions of corporate and other taxes to fund our public services, wages and pensions.There are other issues such as patent royalties which cost hundreds of millions to the state.
Hopefully the Dep. of Finance will release documents regarding this soon. It would be nice to see their reasoning. However, so long as a global tax regime is not put in place, some countries will have a strong incentive to engage in aggressive tax competition to attract FDI. Other countries are able to stay out of the rat race because they have other qualities that make them attractive to MNCs, or they have enough indigenous industry to sustain their tax base. The standard narrative is that Ireland introduced the 12.5% corporation tax rate because it had very few other means of attracting investment, and there probably is some truth in this. But even countries who have strong domestic industries and other attractive “factor endowments” such as the UK may decide to introduce such tax regimes, and Luxembourg also doesn’t fit into that picture… Perhaps it’s the mindset of “well everyone else is doing it, so I might as well”, perhaps its a low tax neoliberal ideology, or perhaps its corruption. It really is quite hard to say until we know more.
Great, where do I get my cheque?
Sorry reading through the mess of post is really pissing me off now. Those for taxing multinationals are just bloody moronic. Your average high end guy in apple or Google will take 100-200k a year, taxed in Ireland. He will buy a house or be provided a house income to Ireland, he will buy or be provided a car, income to Ireland, he will either piss his net disposable income against a wall in Ireland or get married and spend twice as much of n Ireland. Multinationals create jobs and national gdp. They employe Irish people on top of the imports because their are quotas on minimum Irish spend. Stop being short sighted, the trickle down effect is bigger for the country than your stupid self serving interest of these guys are getting more than me. Seriously you think any other country in the world would turn them down? Grow up and look at the big picture.
“They employe Irish people on top of the imports because their are quotas on minimum Irish spend. ”
What is the quota?
Last point because this thread is gone off point. Anyone can open a legal offshore company in the Seychelles or similar for £600 a year and bank a/c for min deposit of 100k.
100% legal. So don’t argue with me on this.
So apple alone with €150bn declared today could buy a decent sized country and set their own tax laws.
Their here for one reason other than the tax advantage.
Good skilled, well educate English speaking work force and direct access the to the EU.
Grow the feck up and stop being really stupid.
The country needs these companies. You think your local shops & business survive on the cash your holding?
Just goes to show how corrupt our government really is
Does it though or does it just show that international and not just Irish tax laws need to be brought in line ?
Bloody madness, this wouldn’t be an issue if they were based in Germany or france.
Seriously the boom was born out of low corporate taxation and good jobs to supplement the delta I n taxation. Everyone was a winner until we got greedy.
Leave them alone or we’ll scare off all the big names who are contemplating jumping from the UK.
Time to tell the EU to bugger off. Ireland has the unique position of being native English speaking and never likely to leave the EU. The Tories are busy scaring off the big players in the UK. Where do you think HSBC and the like is going to go, back to Chinese controlled HK?
Think about the big picture.
Surely The Revenue Commissioners have or will do a tax audit like they do all over the Country!
If not why not?
The Revenue Commissioners should please answer truthfully?
How about this, multi nationals pay 0.01-% additional tax on all monies moved through Ireland. Irish tax payers can donate 5% of their total tax bill to local charity or government agency of their choice. Health, education, homeless etc, Social welfare takes a 10% cut for those out of work for more than 10years. 25% to those who never worked unless disabled. Now let’s see the self interest
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