“Apple’s chief financial officer Luca Maestri said on Tuesday the iPhone maker’s investment plans in Ireland have not changed in the wake of the EU ruling that it must pay up to €13 billion in unpaid taxes to the Republic,” Joe Brennan reports for The Irish Times. “‘We have an outstanding relationship over the years with the Irish government and we are very committed to Ireland,’ Mr Maestri said on a conference call with journalists. ‘We have recently made additional investments in the country and our plans to invest in Ireland have not changed.'”
Brennan reports, “Apple, which set up a base in Ireland in 1980, said in November that it plans to add a further 1,000 jobs in its base in Cork by the middle of 2017, bringing its Irish workforce up to 6,000.”
“While accountancy firm Grant Thornton estimates that Apple faces an additional interest bill of €6 billion as Ireland is forced to recover back taxes from the company between 2003 and 2014,” Brennan reports, :Mr Maestri said ‘we believe it is going to be a significantly lower number.'”
Read more in the full article here.
MacDailyNews Take:
Newsflash: Corporations don’t pay taxes, you do. “Corporate taxes” are simply passed along to the consumer. It’s how the government sneakily double-taxes its citizens. You’re taxed on your income and then again on what’s left via higher prices across the board. — MacDailyNews Take, December 4, 2015
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There was no special deal that we cut with Ireland. We simply followed the laws in the country over the 35 years that we have been in Ireland. If the question is, was there ever a ‘quid pro quo’ that we were trying to strike with the Irish government – that was never the case. — Apple CFO Luca Maestri, September 2014
SEE ALSO:
Apple CEO Cook blasts European Commission for ‘ignoring Ireland’s tax laws, upending the international tax system’ – August 30, 2016
European Commission to rule Ireland’s tax arrangement with Apple illegal – August 29, 2016
Ireland prepares for a fight with EU over Apple tax clawback – August 29, 2016
U.S. government warns EU: Do not hit Apple with a massive back tax bill – or else – August 25, 2016
European Commission denies anti-U.S. bias after U.S. Treasury intervention over Apple, Amazon tax probes – August 25, 2016
Time for a new CFO.
Let me try to explain the downvoting here (as I understand it).
Your lack of confidence in the CFO presumably comes from the perceived foolishness of investing in Ireland after this massive new tax penalty. In other words, why do Apple now reward EU with additional business in Ireland after they shaft them this way?
Well, you may not know this, but Apple has been in Ireland for decades. During the 90s, PowerMacs were built there in the 90s, and iMacs are still being built there. In fact, the manufacturing plant in Cork is the only plant making Apple hardware that Apple actually owns (the others being owned by others, such as Pegatron, FoxConn, etc). What Apple wants to say is that their Ireland operations aren’t just a non-descript office in an office park, but a manufacturing plant that has been employing Irish people for decades. It is a narrative that goes counter to the idea of Apple setting up a P.O. Box shop in Ireland in order to get a sweet EU tax deal.
I can’t speak for Jeff. I don’t know how competent Maestri really is, but the bottom line is that Ireland is a reasonably good place to do business if you want an English speaking population, low real estate & overhead costs, and you don’t need the best infrastructure or centralized location. The reason that Ireland has offered the highly competitive corporate tax rate is to lure investment. 12.5% is the book rate, and if every company paid it, they would all still come out well ahead of the tax rates of any other nation in the western hemisphere. The problem is that wasn’t enough, Apple and MS and others negotiated for special rates and got them through a corrupt (and/or incompetent) Irish government.
Complete tax avoidance for select companies should be against the law. It the EU, it is. As it should be.
I always liked to imagine my old blue-and-white tower being put together over there by a distant relative lending some Irish whimsey to the motherboard he customised for me, a psychic strand that I was never quite sure I entirely imagined. When it was time to let go of that Mac, I was sure to find a good new home for it and said a blessing over it. I never did such a thing with mechanical monsters built by Gateway or Dell—they just broke and were discarded. Apple is an idea, not just a company, and their computers, more than just things.
Apple also wholly owns a plant in Elk Grove, California that is being actively expanded and repurposed, with aggressive hiring for a data centre? manufacturing facility?—they aren’t saying.
It’s no wonder the big investors are entirely fed up with Apple. Everything Apple does tends to harm loyal shareholders. The internet is filled to the brim with this $14.5 billion tax Apple has to pay. Bad news for Apple travels at the speed of light. Apple has been squirreling away cash like Scrooge McDuck and now some robber is going to break into their vault and walk away with a handful of Apple loot. It’s really great when a organization can pass a law for retroactive taxes that didn’t exist prior. I sure hope the U.S. doesn’t pull that one on our citizens.
Apple shareholders better get used to this. Anything Apple does is always going to end up backfiring on shareholders.
Newsflash for MDN. Corporations will base the price of their products on what the market will bare, costs of goods has an effect but maximizing profit is the rule. The price of an iPhone doesn’t change if Apple has to pay a higher or lower tax, if they pay a lower tax they just keep the profit which will only benefit the shareholders..
The EU hates tax competition and Irish tax rates are much lower than the rates on the continent. I have seen speculation that Ireland will follow England out of the EU because the bulk of Irish trade is with England. The EU deserves to die.
You got it wrong. The EU is very happy for different member states to enact different tax schemes, just as happens in the USA.
Ireland’s mistake was that they offered a 12.5% corporate tax rate to everyone EXCEPT a few favorites. Ireland enabled Apple and others to pay less than 1% taxes for the past decade via what amounts to a complicated money laundering scheme. Other companies were denied the ability to do the same.
Rules need to apply to everyone. If Ireland carves out special breaks for its buddies, then that is in violation of long established law.
What’s disappointing is that Apple today can’t come up with new Macs on a reasonable schedule but it can hire thousands of clerks and tax lawyers to move money around the globe.