Irish Economy
Corporate Tax 2014: Apple's massive tax avoidance revealed in Ireland and Australia
By Michael Hennigan, Finfacts founder and editor
Mar 7, 2014 - 7:04 AM

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Corporate Tax 2014: Apple's tax avoidance is revealed in reports in Ireland and Australia that focus attention again on Ireland's role in saving the electronics giant billions in taxes.

Apple shifted an estimated A$8.9bn (€5.84bn) in untaxed profits from its Australian operations "to a tax haven structure in Ireland in the last decade," an investigation by The Australian Financial Review has found.

The AFR said that last year Apple reported pretax earnings in Australia of only $88.5m after it sent an estimated A$2bn of income from its Australian sales to Ireland via Singapore, where Apple negotiated a secret tax deal in 2009.

In Ireland, according to accounts obtained by The Irish Times (it doesn't publish them), for one of Apple's unlimited companies, which does not have to file financial accounts at the Irish Companies Office, Apple Sales International (ASI), the consumer electronics giant cut its Irish tax bill by more than €850m between 2004 and 2008, using an unexplained “lower rate”.

The newspaper says ASI provides “sales and marketing services” to Apple subsidiaries around the world that sell iPods and iPads. Between 2004 and 2008, it reported profits before tax totalling A$7.11bn on sales of more than A$29bn.

The accounts for those years state the corporation tax that would be due using Ireland’s 12.5 per cent rate - -  €890m over the five years. But they also show how much corporation tax ASI actually paid to Irish authorities – just €36m.

The Australian Financial Review says that Apple Sales International has reported more than $US100bn (A$112bn) of profits in the last five years. Its accounts show it has paid less than 50¢ in tax on every $1000 of income.

Last May the US Senate’s Permanent Subcommittee on Investigations revealed how Apple was using Irish offshore companies that it considered as 'stateless' -- not obliged to report to any tax authority in the world -- to route much of its overseas income through tax-free.

Ireland closed the 'stateless' loophole but it didn't impact the Irish companies in West Atlantic tax havens that are part of the 'Double Irish Dutch Sandwich' tax-dodging scheme. 

The AFR says that in the four years from 2010 to 2013 Apple’s Australian arm, Apple Pty Ltd, reported to ASIC total sales of $20bn and pre-tax profits of $387m. The Financial Review analysis shows that Apple’s Australian arm paid an estimated A$7.2bn in profits to Apple Sales International in Ireland for “intangibles” over the same time frame. (Apple Sales International reports marketing, research and other expenses in Ireland.)

In total, from 2002 to 2013, an estimated A$8.9bn of Australian income has been shifted to Ireland.

The AFR said Noel White, Ireland’s ambassador to Australia, said Ireland was unapologetic about its low rates - - what about no rates?

Selection of Finfacts tax reports 2013/14:

US company profits per Irish employee at $970,000; Tax paid in Ireland at $25,000

Corporate Tax 2014: White House and Congress to publish US reform proposals

Corporate Tax 2014: US proposal of 17% rate for foreign profits

Irish Corporate Tax 2014: How official spin and distortion works - in short-term

Irish Corporate Tax 2014: Noonan signalls publicity offensive on effective rate

Corporate Tax 2014: Obama running with the hare and hunting with the hounds

Corporate Tax 2014: Yahoo! joins “Double Irish Dutch Sandwich” club; IDA Ireland wants more members 

Corporate Tax: Kenny reassures Facebook but Ireland's rate is too high

Foreign government requests Bermuda to investigate Microsoft's Irish-linked subsidiaries

G-20 Australian presidency focuses on tax "leaking bucket"; Ireland still in denial?

Corporate tax reform and the biggest tech tax havens

Ireland's new International Tax Charter: More political kabuki

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Corporate Tax 2014: UK's revenues plunge; France considers reform

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