

Ireland is to close a tax loophole used by Apple - gadders
http://www.bbc.co.uk/news/business-24542794

======
sjwright
A loophole used by Apple.

And Google, and Microsoft, and Adobe, and Facebook, and Oracle, and Pfizer,
and Starbucks, and General Electric.

But Apple makes the headline. Normally this would be headline whoring by the
predictable media, except that this is the BBC, and I thought Starbucks was
made the whipping boy for tax evasion in the UK.

~~~
riffraff
I _think_ the difference is google and microsoft are using a different
loophole (double irish), which by the way wouldn't be closed by this change.

EDIT: to clarify: apple is playing with one subsidiary being resident
"nowhere", whereas other companies have subsidiaries being resident in tax
havens. The reform will forbid the former, not the latter.

~~~
ra
So the headline should be, "Ireland to close Apple's tax loophole, but leave
bigger one open"

~~~
mcherm
More accurately: "Ireland will not close Apple's tax loophole; won't close the
other one either.", since the article explains that all Apple needs to do is
to declare it's Irish subsidiary to have a tax domicile of Bermuda (or
anywhere else without corporate income tax) and Apple's current loophole
remains intact.

~~~
raverbashing
Exactly

There are ways this can be worked around (quite easily as pointed)

Nothing changes in practice

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ogig
Don't ask me exactly how, but Apple (and others i guess) manages to get paid
by Spanish taxing organism by declaring negative results. They do redirect the
benefits and payment of taxes to Ireland, where i guess that happens again.
Spain pays Apple in concept of fiscal help, they might need some, right?

[http://cincodias.com/cincodias/2013/05/22/empresas/136920666...](http://cincodias.com/cincodias/2013/05/22/empresas/1369206664_728892.html)

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vaadu
Apple made profits outside of the US and is keeping that money outside the US.
They are also in full compliance with tax laws. They have no obligation to pay
more in taxes than the law requires.

The whining here smacks of envy.

~~~
notahacker
The article here explains how according to tax authorities, a Apple's Irish
registered subsidiaries avoided Irish tax by being based _nowhere_ for tax
purposes (earlier in the year they had the cheek to issue a corporate
communication stating they didn't use tax havens...). Legal or not, if you
think that's anything other than a perversion of the truth I have a bridge to
sell you.

The apologism here smacks of someone that didn't read the article.

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hackerboos
Headline should be 'Apple forced to use other Irish tax loophole'

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DigitalSea
I noticed something interesting the other day on my bank statement as I pay
for a LinkedIn premium account and it says, "LinkedIn Ireland" or something
along those lines. LinkedIn uses Ireland to dodgily get out of paying tax too.
Every major company does, its been a known loophole for a long time now.

~~~
netcan
Google bills most non US clients from Google Ireland too. Obviously there are
tax considerations. But Google (non US) and Linkedin genuinely have big
presences in Ireland. They do account management, customer service,
accounting, etc out of massive Dublin offices. Language, availability of
educated generalists and willingness of European employees to immigrate to
Dublin are also big considerations. They aren't billing to shell companies.

This is a genuine loophole that is being closed, not an intentional piece of
policy.

------
Peroni
A more extensive and detailed explanation here:
[http://www.irishtimes.com/business/economy/ireland/ireland-w...](http://www.irishtimes.com/business/economy/ireland/ireland-
wants-to-play-fair-over-international-tax-competition-says-noonan-1.1561583)

------
lazyjones
The only efficient way to combat such tax loopholes is to abuse them. I'm not
claiming that Apple or any other of these behemoths is doing it for that
purpose of course, but smaller companies should do the same until it hurts
governments enough to get them to act. They don't care about a few huge
companies avoiding taxes as long as all small companies are paying theirs.

------
wikiburner
Just curious - you hear rumors that the E.U. is considering clamping down on
Ireland's tax laws.

Is there any truth to this? Could it happen anytime soon?

If so, does Ireland then consider leaving the E.U., or is Ireland's E.U.
membership more important to those U.S. companies than the tax benefits?

------
sjwright
More information about the underlying tax loophole:
[http://en.wikipedia.org/wiki/Double_Irish_arrangement](http://en.wikipedia.org/wiki/Double_Irish_arrangement)

~~~
ma2rten
It says that the Dutch Railways company (Nederlandse spoorwegen) uses that
scheme, which is interesting, because that company is state-owned. You
wouldn't say that that company is interested in tax evasion. Crazy world that
we live in.

~~~
digitalengineer
Why not? Even our Dutch Royal Family have such constructions. (Via the palace
and Guernsey).

~~~
ma2rten
Because normally the profits would go into Dutch treasury, either in the form
of tax or dividend. This way a part goes to the Irish.

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furyg3
As a non-accountant, what's the permanent solution to these types of race-to-
the-bottom tax-shelter problems? I mean, other than all countries everywhere
agreeing on taxes?

Increased sales tax paid where the consumer is located?

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jellicle
The real loophole is in U.S. law, which allows Apple to make large profits
selling things in the U.S. but not pay any tax on them through the magic of
self-dealing transactions.

It's as if you gave all your income to your cat - whose bank account you
happen to control - and then were able to deduct those gifts fully from your
tax return, leaving you with no income and no tax liability. The tax man
wouldn't look kindly on individuals doing that, but does look kindly on large
corporations doing that. Odd.

~~~
sigzero
Can you point to an article that explains this better? Because if not, I call
shenanigans.

~~~
Spooky23
[http://online.wsj.com/news/articles/SB1000142412788732403480...](http://online.wsj.com/news/articles/SB10001424127887324034804578348131432634740)

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grinnick
Is this going to hurt the (currently thriving) tech/startup scene in Ireland?

~~~
patrickk
I would say having the big tech giants in Ireland has virtually no impact
whatsoever on the Irish tech scene. There doesn't seem to be any movement of
staff from tech giants to startups for example, or any investments by tech
giants in Irish startups. Israel is way more successful at the latter, also at
achieving acquisitions by major US tech companies.

Disclaimer: I live in Ireland, and have worked in a startup and interned in
Apple.

~~~
hopeless
Yep, totally agree.

There's almost no interaction between the big tech multi-nationals and local
tech scene. This is mostly because the large "tech" companies mostly employ
finance, sales, support and logistical staff in Ireland rather than the raw
technical talent of the "startup" scene

