Apple May Have Avoided $24 Billion in Tax Across EU: Lawmakers (2)

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By Ben Stupples

Apple Inc. may have dodged as much as $24 billion in taxes in the European Union over the past three years, according to a parliamentary group report that claims to expose the iPhone-maker’s latest abuse of legal loopholes.

The Cupertino, Calif.-based company may have paid just 0.7 percent of tax on its EU profits from 2015 to 2017, according to a June 21 report from the European United Left-Nordic Green Left, a left-wing EU parliamentary group.

The report follows the publication of the Paradise Papers, a data leak that revealed the offshore tax planning of rich individuals and global companies, including Apple and fellow U.S. multinational Nike Inc. The data dump was published by the International Consortium of Investigative Journalists in November 2017.

As part of their ongoing probe into the Paradise Papers, EU lawmakers had asked Apple to answer questions in public about its tax planning. Last month, Apple declined the invitation, offering to meet privately instead.

“We decided to publish this report because Apple is one of the most prominent companies exposed by the Paradise Papers leaks,” EU lawmaker Martin Schirdewan said at a June 21 news conference. “The lack of transparency around Apple’s global tax affairs means the numbers in the report can only be estimates.”

Shining a Light

The report marks the latest scrutiny of Apple’s affairs from within the EU.

In August 2016, the European Commission ruled that Apple had received illegal tax breaks worth 13 billion euros from Ireland between 2003 and 2014. Both Apple and Ireland, where the company has its European headquarters, have appealed the decision. The June 21 report studies Apple’s taxes since the commission’s probe.

Following the release of the Paradise Papers, Apple defended its global tax affairs in a Nov. 6 online post.

“Apple believes every company has a responsibility to pay its taxes, and as the largest taxpayer in the world, Apple pays every dollar it owes in every country around the world,” it said. “We’re proud of the economic contributions we make to the countries and communities where we do business.”

In a June 21 email to Bloomberg News, a spokesman for Apple said the company didn’t have an updated comment.

2015 Changes

Apple’s online post last year came in response to a Nov. 6 article from the ICIJ that published details of the company seeking to avoid paying buiness taxes when it changed its corporate structure in 2015.

In addition to online posts, CEO Tim Cook has passionately defended Apple’s tax affairs. “We don’t depend on tax gimmicks,” he told U.S. lawmakers in May 2013. “We pay all the taxes we owe.”

Like Apple, Ireland has been forced to defend its tax affairs. In a June 21 email to Bloomberg Tax, a Department of Finance spokesman declined to comment on the European United Left-Nordic Green Left’s report. He stressed, though, that Ireland’s tax regime is one of the “most transparent in the world.”

“We continue to play our part internationally in ongoing work to ensure that international corporate tax rules are fit for the modern world and ensure corporate tax is paid where value is created by business,” he added.

Across Europe, Apple has around 22,000 employees. The U.K. has the company’s largest workforce in the EU, with nearly 6,500 staff.

In January, Apple said it had paid a total of 217 million pounds ($287 million) in additional U.K. corporate taxes last year after an official accounts inspection from the country’s tax authority. At the time, a spokeswoman told Bloomberg Tax that the settlement reflected Apple’s increased activity in the U.K.

With assistance from Ali Qassim (Bloomberg Tax) and Aoife White (Bloomberg)

To contact the reporter on this story: Ben Stupples in London at bstupples@bloombergtax.com

To contact the editor responsible for this story: Penny Sukhraj at psukhraj@bloombergtax.com

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