Why is Apple's European headquarters in Ireland

Apple continues to hoard billions in Ireland in a tax-friendly manner

Brussels / Vienna - The tricks of the big multinationals have been known for a long time. Whether Google, Amazon, Apple or Ikea: The high sales in Europe are "optimized" for tax purposes, as it is called in the technical jargon. In practice, there is usually a holding company in Europe that is based in Ireland, Luxembourg or the Netherlands. There are massive tax breaks there. These goodies are combined with high license fees that subsidiaries in other countries pay to the holding company. And, to round things off, other companies in the Caribbean or on the Channel Islands are often interposed.

Now two experts have taken a closer look at Apple's construction. The iPhone and Macbook manufacturer has come into the special focus of the EU Commission and has to pay 13 billion taxes after a decision in Brussels. Piquancy on the edge: Ireland is reluctant to refund and has therefore been sued by the EU Commission at the European Court of Justice. A rate model has now been developed.

Search for clues

But back to the investigation: On behalf of the Left Group in the European Parliament, the experts Martin Brehm Christensen and Emma Clancy went on a search for clues as to how the tax payments look after a restructuring of Apple. The evaluation of the construction of the group as aid by the EU Commission only related to the period up to 2014. Ireland then had to make some changes in tax law, the effects of which should be manageable.

But even after that, Apple's tax payments have not swelled too much. The investigation is difficult because the US company does not provide precise information on the revenues in individual countries, but only shows large regions. Europe then also includes Africa and the Middle East, for example. However, a balance sheet analysis suggests that cash hoarded across Ireland increased by $ 59 billion from 2015 to 2017. The authors equate this amount with the sum of the proceeds.

Combined with further data from Apple publications, the analysis comes to the conclusion that the tax rate lies in a range of 0.7 to 8.8 percent. The authors believe that this would have saved the group up to 21 billion euros in taxes.

Pushing taxes like a champion

But how does the advantageous structure come about? After the changes to the Irish rules, Apple used a transitional clause and founded companies on the Channel Island of Jersey to replace the so-called Double Irish. With this model, Apple, like many other corporations, had used the advantage offered by Ireland for cases in which a subsidiary manages license fees that belong to another subsidiary. Even if one can only make assumptions about the tax consequences of the new construction, documents from the Paradise Papers allow the conclusion that the successor model is also strongly "optimized". However, Apple denies having used the construction of the Double Irish.

For left-wing MP Martin Schirdewan it is clear that Apple is "pushing its taxes like a champion" even after the restructuring. (as, June 21, 2018)