page_title: Criticism of Apple Inc.
section_title: Tax practices
hierarchical_section_title: Criticism of Apple Inc. / Tax practices
caption_attribution_description: English: Press materials from the EU Commission findings against Apple in Ireland regarding illegal State aid
context_page_description: Apple Inc. is a multinational American technology company which sells consumer electronics that have been claimed by critics to combine stolen and/or purchased designs that it claims are its own original creations. Criticism of Apple includes allegations of unethical business practices such as anti-competitive behavior, rash litigation, and dubious tax tactics, their production methods involving the use of sweatshop labor, customer service issues involving misleading warranties and insufficient data security, and concerns about environmental destruction. Additionally, it has been criticized for its alleged collaboration with U.S. surveillance program, PRISM.
  Allegations against the company are varied, including:
  Thwarting smaller competitors
  Dishonest corporate policy
  E-waste and environmental destruction
  Financial affairs
  Harsh labor conditions and child labor accusations
  Collaborations with the U.S. government and the NSA
context_section_description: In the late 1980s Apple was a pioneer of an accounting technique, "Double Irish With a Dutch Sandwich", which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. In 2004, Ireland, a nation of less than 5 million, was home to more than one-third of Apple's worldwide revenues, according to company filings. Robert Promm, Apple's controller in the mid-1990s, called the strategy "the worst-kept secret in Europe". Such strategies helped Apple keep its international taxes to 3.2 percent of foreign profits last year, to 2.2 percent in 2010, and in the single digits for the last half-decade, according to the company's corporate filings.
  According to a Senate report on the company's offshore tax structure concluded in May 2013, Apple has held billions of dollars in profits in Irish subsidiaries to pay little or no taxes to any government by using an unusual global tax structure. The main subsidiary, a holding company that includes Apple's retail stores throughout Europe, has not paid any corporate income tax in the last five years. "Apple has exploited a difference between Irish and U.S. tax residency rules," the report said.
  Among the findings in the reports are:
  Almost all of Apple's foreign operations are run through an Irish company with no employees.
  Apple pays 2%—or less—in corporate income tax in Ireland. (Ireland's standard rate of corporation tax is 12.5℅).
  Apple Operations International, which provided 30% of Apple's worldwide net profits from 2009 to 2011, doesn't pay taxes anywhere.
  Apple's US profits keep ending up in Ireland, too.
  Most of the $102 billion Apple is keeping "overseas" is in US banks.
  The magic of "check-the-box" makes whole companies disappear.
  Apple is seemingly terrible at estimating its own taxes.
  On May 21, 2013, Apple CEO Tim Cook defended his company's tax tactics at a Senate hearing.
  As part of the Luxembourg Leaks, Apple has been revealed to use the Luxembourg tax haven for tax avoidance.
  On August 30, 2016, after two-year EU illegal State aid case against Apple in Ireland, the EU's competition commissioner, Margrethe Vestager, concluded that Apple had received "illegal state aid" from Ireland during 2004–2014 via its use of a hybrid Double Irish tax scheme on which it received private rulings by the Irish Revenue Commissioners. The Commission ordered Apple to pay 13 billion euros ($14.5 billion), plus interest, in unpaid taxes, the largest corporate tax fine in history. The Irish government "unanimously" agreed to appeal the ruling, claiming there was no departure from the applicable Irish taxation law and that the Commission's action was an intrusion into Irish sovereignty (since national taxation policy is excluded from Union treaties). Apple have also announced that they will appeal the Commission's findings.
  On 5 November 2017, the Paradise Papers, a set of confidential electronic documents relating to offshore investment, revealed that Apple is among the corporations that "avoided billions of dollars in tax" using offshore companies. In 2014, Appleby, an offshore legal service provider referred to in the papers, worked with Apple in a function similar to a general contractor to provide offshore offices on the island of Jersey in co-operation with the law firm Baker McKenzie.
  As part of Apple's discussion with the EU Commission regarding its illegal State Aid case, Apple agreed to close its Double Irish tax scheme, however on the 22 July 2016, the Central Statistics Office (Ireland) (CSO) announced that it was re-stating Irish GDP upwards by 26.3 per cent (later increased to 34.4 per cent).   The CSO would not release the source of the revision and restricted releases of regular data to hide the identity of the source.  Nobel-prize winning economist Paul Krugman called the affair Leprechaun economics.  It was not until Q1 2018, that economists had enough data to show that the source of the Leprechaun Economics rise in Ireland's GDP was Apple restructuring out of their Double Irish tax scheme, and into a new Irish tax scheme, the CAIA a
caption: The EU Commission's diagram of Apple's "Double Irish" BEPS tool
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