Ireland Is Looking To Close Apple's Favorite Tax Loophole
AP Photo/J. Scott Applewhite
Ireland is moving to phase out the "Double Irish" tax structure that has let companies like Apple and Google save billions of dollars in taxes, sources tell Australia's iTnews. Although the change is not sure, it is reportedly "more likely than not" to happen.
Ireland's tax structure helped Apple achieve a staggeringly low tax rate of 3.7% on overseas revenue.
How the supposed loophole works is, basically, that multinational companies transfer income to an Irish subsidiary that re-transfers income to a company registered in Ireland that is a tax resident in a tax haven nation. The reported change would make all companies registered in Ireland eventually pay taxes in Ireland.
Apple employs 4,000 people in Cork, where it uses the name Apple Operations International.
As you can see in the chart below, the Double Irish has been a boon for Apple.
Apple avoided paying $12.5 billion in taxes in 2011 and 2012 alone, according to information Apple submitted to Congress when CEO Tim Cook testified on Apple's tax policies last year:
Closing the tax loophole would make Apple an Irish tax resident, effectively slicing its profit margins on overseas revenue.
Investors seemed unshaken by the news on Monday: Apple's stock closed down less than a point at $99.81.
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