Irish Government May Close Apple's Biggest Tax Loophole

DavidGilbert99 writes "Ireland and its tax system came under some extreme scrutiny earlier this year when it was revealed that Apple funneled billions of dollars of revenue though three subsidiaries based in the country. Thanks to a loophole, none of these subsidiaries were tax-resident in Ireland, meaning they didn't even have to pay Ireland's relatively low 12.5% corporation tax rate. Worryingly for Apple, Ireland's finance minister may now shut this loophole. A measure within a new budget bill (PDF) would disallow Apple's status as a 'stateless' corporate entity for tax purposes. Apple will still be able to select a country like Bermuda as its tax residence, but it's a step in the right direction."

Comments

Because Apple

[kommakazi]

I'm sure no other companies use this.

Re:Because Apple

[Anonymous Coward]

Well, currently, no other "most valuable company in the world" does. You know, because like Highlander, there can be only one.

Re:Because Apple

[Xicor]

actually most fortune 500 companies do something like this. they find loopholes in the american taxes by funneling money through other countries, but the other countries have loopholes going the opposite direction so they dont have to pay taxes there either. facebook last year only had to pay 5% in taxes or something.

Re:Because Apple

[Anonymous Coward]

Saudi Aramco, the actual current most valuable company, doesn't pay shit because they basically own the Saudi government, which is a pretty sweet gig if you can get it.

(But no, let's keep pretending that a cellphone manufacturer is the most valuable company in the world because they have the highest market capitalization when you sort everybody on Google Finance.)

Re:Because Apple

[djnanite]

Actually, it's the awful commenters that are turning people away. For example, you only had to do a search in the Slashdot Search bar for 'Google Tax' to see half a dozen published stories about Google's tax exploits.

Re:Because Apple

[Charliemopps]

Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple’s methods, say accountants at those companies.

http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html?_r=0

Apple literally invented the technique.
Others followed to compete.

Personally, I support any and all means of tax avoidance, so I don't count it against them. But I love bursting Apple Fanboys bubbles.

Tax Avoidance

[Anonymous Coward]

I will not speak out about this practice that hurts me indirectly because I am deluded into thinking that any day now I'll be rich enough to make use of it myself.

  - Joe Sixpack Americano

Re:Tax Avoidance

[dgatwood]

Many jobs are nonessential up until they aren't. For example, you don't need the people who inspect aircraft repairs or nuclear power plant repairs to be there every minute of every day, but if they don't do their jobs for a long enough period of time, you get consequences.

Tax everywhere

[prestonmichaelh]

I don't understand why countries like Ireland or Bermuda or wherever don't all just charge a small tax of some kind (like say 5%) that keeps the companies coming there, but gets them tons of money. What does Bermuda get out of having Apple "based" in Bermuda if they don't get any tax revenue? They get no additional jobs or property taxes (except maybe a mailbox rental).

Re:Tax everywhere

[cheesybagel]

Different countries have different ways of appropriating revenue. Take Russia with their relatively low flat tax. It was made possible in a large part because of the State is being funded by oil tax revenues. In the case of Bermuda they have these low taxes for corporation and individual income but the kick is that land taxes are extremely high and they live on tourism revenues so you get taxed for snorkling, renting a hotel, etc. Monaco has the casino profits. Etc.

Good

[msobkow]

It's about time the multinational thieves got lynched and paid their fair share.

Oh wait...

[kommakazi]

Google: http://www.irishtimes.com/business/economy/europe/concern-about-irish-tax-reflects-disquiet-about-google-1.1559370
M$: http://www.businessinsider.com/apple-microsoft-avoids-taxes-loopholes-irs-2013-1

Not a Loophole!

[mythosaz]

A loophole is unintended.

If anyone thinks that the tax code and the ability to do exactly what Apple (and others) are doing isn't completely intention is an idiot.

Re:Linkbait

[MickyTheIdiot]

This is bullshit. The link between huge corporations and jobs has been use to justify all types of abuses and it's time to move on. The Internet has killed that link. We are shoveling more an order of magnitude more money (at least) towards corporate welfare than we do towards "real" welfare based on that theory. The small business is the only that is going to save he economy of the U.S. because those are the only jobs that are based in communities. The race to the bottom has made many multi-national employees no better off than slave labor. It's time to STOP shoveling money towards he biggest multinationals and taking care of the people that are doing the REAL capitalism, and that's small business owners.

Not a US company - Can't lobby

[Leuf]

I have no problem with corporations taking advantage of whatever the law allows them to do but there should be consequences. If the government is going to consider a corporation to be like a person with 1st amendment rights and money to be speech, well they are declaring their corporate personhood to not be a citizen, only a resident. Residents don't get to vote, only citizens. If you don't have a vote then you shouldn't have any right to contribute anything to the election process. If you want a voice in the government then pay taxes.