Apple's Irish Tax Loophole is Likely to be Closed

By Gerald Lynch on at

Apple's made a pretty penny over the years by exploiting the well-known "Double Irish" tax loophole, allowing it to save billions on its international profits. But those heady days of morally iffy dealings may be coming to an end, with the Irish government expected to "phase out" the loophole as part of a budget hearing today.

For Apple, the law allows it to be seen as a tax resident of the country from which it is managed, not incorporated, allowing it to declare its Cork headquarters as not being a tax resident of any country. With profits pushed to an Irish subsidiary, the 12.5 per cent Irish tax rate is levied as it is managed by Apple corporate in the US. Its Irish arm, ASI, is out of Irish tax jurisdiction.

Under the expected changes to Irish law, companies operating within Irish borders will become tax residents "over time". This will allow companies time to rearrange their accounting methods, but should ultimately lead to fairer tax payments. [Apple Insider]

Image Credit: Apple Store from Shutterstock