Tech Latest - - by Niall De'Ath

Apple to pay billions over profit sheltering

Apple to pay billions over profit sheltering Image: Apple

Apple can’t seem to break free from the watchful eyes of the government, and is now accused of sheltering profits via an Irish home base. The EU has been conducting research into international tax avoidance, and possible fines believed to go as high as billions of euros have been confirmed.

The European Commission has officially ruled that Apple should pay £11bn in back taxes. Yikes.

This wouldn’t be the first time Apple has come under fire for using Ireland to avoid tax, as the Senate committee previously accused the company of avoiding US taxation.

The current investigation attempted to discover if the Irish government actively offered more generous tax deals, which is illegal. The Irish government and Apple were appealing the accusation and claimed any arrangements were justified and legal. They will continue to fight against the ruling, despite the evidence discovered.

The investigation revealed that Apple had managed to avoid the 12.5% in standard Irish corporate tax, paying 1% in 2003 and 0.0005% in 2014.  Commissioner Margrethe Vestager concluded:

“The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years,”

But how will this effect Apple on the whole? In an official statement from Apple, they highlighted the harm that will befall their employees and job creation within Europe. They further argued that the investigation was not focused on how much Apple pays in taxes, but who exactly collects them.

“The Commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money. It will have a profound and harmful effect on investment and job creation in Europe.”

Michael Noonan, the Irish finance minister voiced similar concerns over his opposition to the Commissions ruling, stating that he will seek further cabinet approval to appeal the decision.

Don’t worry too much about Apple, however. With $53bn in profits during the 2015 financial year, they should recover fairly easily.

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