Barclays: Changes to Irish tax law a ‘minor issue’ for Apple

“Though Ireland is set to close its tax loopholes in January of next year, the changes won’t be applied to Apple and others until 2020, resulting in a ‘relatively neutral’ outcome for AAPL shareholders, investment firm Barclays said this week,” Neil Hughes reports for AppleInsider.

“Analyst Ben A. Reitzes characterized the upcoming changes to close the so-called ‘Double Irish’ tax loophole as a ‘minor issue’ for Apple. With the effect coming in 2020, he said the temporary relief balances against slightly lower long-term earnings power,” Hughes reports. “The “Double Irish” provision allows companies with operations in Ireland to route profits to another Irish subsidiary, which has tax residency in a tax-free nation, such as the Cayman Islands… With the “Double Irish” issue apparently addressed, Reitzes seemed more concerned as to whether the European Union would decide to impose a fine on Apple and others for its tax strategies.”

“After the EU investigation into Apple was announced earlier this year, the company responded this week and denied dodging EU tax laws or receiving special treatment from Irish authorities. The iPhone maker said it ‘pays every euro of every tax’ that it owes,” Hughes reports. “Barclays has maintained its ‘overweight’ rating for AAPL stock with a price target of $116.”

Read more in the full article here.

MacDailyNews Take: If Apple operated legally, which they’ve repeatedly said they did, how can the EU legally impose any fines? The EU can’t fine for a future rule change set to hit in 2020, can they?

If they do — and perhaps even if they don’t, based simply on the demagoguery already heaped upon Apple by the EU — then Apple should pull out of Ireland and fully set up shop in the Caymans or wherever the EU doesn’t exist and where the tax situation is most favorable to Apple.

Related articles:
Ireland to end tax lures that drew U.S. firms – October 14, 2014
EU watchdog to give reasons for inquiry into Ireland’s tax treatment of Apple – September 29, 2014
European Commission accuses Apple of prospering from illegal Irish tax deals – September 28, 2014
EU threatens expanded probe into Ireland’s tax practices regarding Apple, Googles, other companies – June 20, 2014
EU’s investigation of Apple’s taxes isn’t going to cause the company any problems – June 13, 2014
EU launches tax avoidance investigations on Apple, Starbucks, Fiat – June 11, 2014
Not in Taxes anymore: On site at Apple’s famous Irish ‘headquarters’ – November 2, 2013
Regan: U.S. tax code spurs loveless foreign corporate ‘marriages’ – May 13, 2014
Ireland to close Apple’s tax loophole, but leave bigger one open – October 15, 2013
G20 think tank OECD proposes blueprint for global crackdown on tax avoidance – July 19, 2013
Thomas Sowell on Apple, corporate taxes, and ‘the road to serfdom’ – May 28, 2013
Taxing Apple just taxes you – May 24, 2013
Don’t tax Apple, tax its shareholders – May 24, 2013
If Apple paid more tax, we might pay less or something – May 22, 2013
Apple CEO Tim Cook pounds another nail into the Keynesian coffin – May 22, 2013
Apple CEO Cook makes no apology for company’s tax strategy – May 22, 2013

17 Comments

  1. As Apple told to Congress, the company does not have companies on Caribbean, Cayman and other islands. NYT blog has claimed Apple has management/ownership firm on British Virgin Islands, but check confirms no such thing. (NYT has provided no evidence of their claims.)

    This means that Apple uses “single Irish”, not double.

  2. Good point MDN…why are Apple setup in Ireland….oh yes to dodge tax payments that they can well afford to pay in full but choose to use a loophole so as to not pay much tax. Far as I am concerned Apple can sod off with its head up its arse. Oh yeah don’t bother trying to turn the lights off as you leave, won’t be able to reach the light switch anyway!

    1. And if Apple weren’t in Ireland, neither it nor its employees would be paying any taxes there at all. Last time I checked, 10% of something was still more than 25% of nothing. Maybe the other EU members have the right to complain, but not the Irish.

      1. That is just the kind of thinking that proves people who support Apple’s position don’t get it. It would be better to not be there at all than fiddle with taxes. Technically they are not breaking the law but Apple could do the right thing by paying the full amount.

  3. The EU have fired the first salvo in what will be a long campaign to force multinational corporations to pay tax on all their earnings. Other nations are looking at similar measures – here in Australia the authorities are looking at the level of business and profit of foreign corporations and the amount of tax they are paying. In the UK there is outrage over the minimal taxes paid by Amazon, Apple and others on their huge revenues.

    In the USA States compete against each other to offer tax incentives – denying the U.S. People substantial tax income which is resulting in significantly reduced spending on infrastructure (bridges, roads etc), health (ie: no work on Ebola vaccines) and other essential community facilities.

    While the U.S. Is largely powerless to reform their tax code (corporations own the politicians these days) the EU is not, and EU action here may well unglue US intransigence and force change around the world.

  4. I can see not applying the tax rules to the amounts already there till 2020 but I don’t see the reasoning for not applying it to any new fiscal activity from the point they start it for everyone else.

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