Apple Inc. is so far under fire from the EU as well as the US for offshoring its profits to Ireland where taxes are lower. Now, who does Apple file taxes to?
According to The Guardian, Apple is being ordered by the EU to pay 13 billion EUR in taxes to Ireland for working around both the US and EU tax systems. The EU says that Apple had a tax deal with Ireland to pay a maximum of 1% tax on all offshored profits.
With the EU trying to get Apple to pay taxes, now the US is arguing with the EU. Since Apple is a US company, it should file to the IRS but with Ireland being in the EU, it also means they have to file to the EU. This is where it gets tricky for all parties.
Ireland is so far planning to fight back the EU order for Apple to pay.
“Member states cannot give tax benefits to selected companies – this is illegal under EU state aid rules” stated European competition commissioner, Margrethe Vestager.
According to sources, Apple off-shored approximately 230 billion EUR in cash and securities to Ireland by getting revenue to go through Ireland’s tax system. The only reason why Apple still has that much in Ireland is the US tax charges if Apple were to transfer the funds to the US.
“A cabinet meeting will be held in Dublin on Wednesday to discuss the fallout from the ruling. At the heart of the Fine Gael-led administration’s objections is that it would cause Ireland reputational damage in the eyes of other mainly US multinationals thinking of establishing their European base in the Republic.” reported The Guardian.
Apparently, Apple is not the only company that is off-shoring profits to other countries to take advantage of low tax rates. Many economists are not happy with Apple’s borderline unethical choices.
Source: The Guardian