Ireland will apparently announce plans to phase out its “Double Irish” tax arrangement that has allowed companies like Apple and Google to save billions, according to a Reuters report citing sources familiar with the matter.
Over the past 18 months, the country has been criticized by both the United States and Europe for tax loopholes that let companies slash their overseas tax rate to single digits. Preliminary findings by the European Commission recently slammed a “sweetheart” tax deal on the part of Ireland that allowed Apple to avoid paying taxes by building up a massive offshore cash pile of $137.7 billion in the country.
Preliminary findings by the European Commission have slammed Apple and Ireland for a so-called “sweetheart” tax deal which allowed Apple to avoid paying taxes by building up a massive offshore cash pile of $137.7bn in the country.
The deal dates back to 1991, and allowed Ireland to provide Apple with illegal state aid. Apple has had a base in the country since 1980.
In a statement, the European Commission said that “the Irish authorities confer an advantage on Apple,” and that this “advantage is obtained every year and ongoing.”
Apple could be made to repay unpaid tax in the EU. Photo: The Daily Show
Regulators are set to break down the reason tax deals given to Apple in Ireland violate EU laws, according to people familiar with the matter.
The European Commission began formal investigations into the tax avoidance issue back in June, and plans to publish its findings as early as today — with the claim that tax deals between Apple and the Irish government could fall under the heading of illegal state aid.
While Apple has yet to make a comment on the matter, the Irish government has spoken up; describing its position as “confident” that the Apple deal represents “no breach of state-aid rules.” It claims that it has already submitted a formal response to the European Commission, in which it addresses in detail “the concerns and some misunderstandings.”
Apple has been using its low-key presence in Ireland to save some big bucks.
Apple believes it’s the highest taxpayer in the U.S, but the company has still been subjected to intense scrutiny because the majority of its cash isn’t located stateside, but in offshore subsidiaries scattered around the globe.
In a U.S. Senate Permanent Subcommittee this summer, Apple was accused of using Irish tax loopholes to avoid paying on about $44 billion in foreign profits. By basing ghost subsidiaries in Ireland, Apple has been able to not pay a considerable amount of taxes to any country. Now the Irish government is considering changing its tax code to prevent such behavior from happening in the future.
An Irish parliamentary committee has dismissed the opportunity to grill Apple and Google over their tax affairs in Ireland, despite requests for a change to the way in which it taxes large multinationals that do business in its country.
The move comes weeks after Apple and Google came under scrutiny for the way in which they use tax “loopholes” or “gimmicks” to avoid paying excessive taxes on international sales. It was revealed that Apple used an Irish subsidiary with zero employees to pay less than 0.05% tax on $78 billion over four years.
Hutchison Whampoa, owner of Three U.K., has today acquired O2 Ireland in a deal worth €850 million ($1.1 billion). Telefonica, O2’s parent company, believes the move will “create a new competitive dynamic in the Irish market,” which Three can now claim 37.5% of with 2 million active subscribers.
We’ve already brought you some of the most interesting topics that came up during Tim Cook’s interview at D11 last night, but if you’d like to watch the entire thing yourself, you can do so right now. AllThingsD has posted the entire thing — which runs for one hour and 20 minutes — online this morning, and you can watch it below.
Apple CEO Tim Cook and CFO Peter Oppenheimer are in Washington D.C. this morning to talk to a Senate subcommittee about Apple’s off-shore cash hoard. The Apple execs are expected to face a lot of heat surrounding Apple’s Irish subsidiary, through which Apple has funneled 64% of its earnings without paying any tax, yet has zero employees.
Before the hearing got underway though, Ireland’s deputy prime minister, Eamon Gilmore, issued a public statement which claimed Ireland isn’t to blame for Apple’s low tax bill, even though the country has become a tax haven for multinationals since the 1960s.
As part of expert testimony at today’s Senate Sub-Committee Hearing to Examine Offshore Profit Shifting and Tax Avoidance by Apple Inc., Professor J. Richard Harvey has made a compelling case that the tax system Apple is taking advantage of needs to have its loopholes closed.
Harvey — a distinguished Professor of Practice at Villanova University’s School of Law — says that while what Apple has done is acceptable under current International tax law, it still widely uses tax tricks and gimmicks to avoid paying what it fully owes.
iOS 6’s Maps is the biggest criticism of Apple’s new mobile operating system. In short, it’s clearly years behind Google Maps, which previously powered Maps in past versions of iOS. Most of the time, complaints about Apple’s new Maps accuse the latter of being under-developed and unreliable compared to Google Maps, but the Irish government has a different concern: they are worried that iOS 6 Maps will result in pilots crashing their airplanes directly into a park.