Apple’s systematic EU tax dodging exposed by new study
The GUE/NGL report coincides with Apple’s refusal to appear before the MEPs in the Parliament’s TAX3 committee in a special hearing on the ‘Paradise Papers’ revelations.
A report commissioned by the Left group in the European Parliament has found systematic tax evasion and abuse of legal loopholes by tech giant Apple between 2015 and 2017.
It examines the corporate tax rate paid by Apple globally and in the European Union after it made significant changes to its corporate structure in 2015. It looks into the methods Apple uses to continue to avoid paying tax today, and how it uses features of Irish tax law and policy that help with the ongoing tax avoidance.
Amongst the key findings include:
1) Apple has no geographical disclosure of profits and taxes wherever it operates – paying $13.9 billion in taxes for the Americas but only $1.7 billion for the rest of the world combined. The research suggests that Apple could be paying as little as 0.7% tax on its EU profits;
2) Ireland plays a crucial role in Apple’s company structure - with 5 of its 7 most significant subsidiaries (owning more than 20 other subsidiaries located around the globe) being incorporated in the country. These subsidiaries have been crucial in holding cash - none of which is disclosed or is subject to EU taxes;
3) Apple has used pre-2015 Irish laws to enact tax avoidance strategies - from residency to intellectual property laws, and transfer pricing to APAs (advanced pricing agreements) etc. Intellectual property, in particular, has been central to profit-shifting involving Ireland;
4) Along with Apple, US multinationals like Starbucks, Microsoft, Google, Facebook, AirBnB and Pfizer have all used the ‘Double Irish’, the ‘Dutch Sandwich’ and even the ’Single Malt’ (Ireland-Malta treaty) to facilitate tax avoidance;
5) The Irish government has been slow or reluctant through delays to phase out the many legal loopholes, which has allowed Apple to exploit the tax system;
6) Apple does not disclose any financial information from its Irish subsidiaries that are taking advantage of Irish financial secrecy allowance for unlimited liability companies.