page_title: Leprechaun economics
section_title: 2018 filings
hierarchical_section_title: Leprechaun economics / Proof of Apple (2018) / 2018 filings
caption_attribution_description: English: Shows the effect of Apple's 2015 "leprechaun economics" restructuring on Ireland's overall economic statistics.
context_page_description: Leprechaun economics was the 26.3 per cent rise in Irish 2015 GDP, later revised to 34.4 per cent, in a 12 July 2016 publication by the Irish Central Statistics Office, restating 2015 Irish national accounts. The term was coined by Nobel Prize–winning economist Paul Krugman to mark the fact that the long-term distortion of Irish economic data by tax-driven accounting flows had reached a climax; by 2020, Krugman said the term was a feature of all tax havens.
  While the event that caused the artificial Irish GDP growth occurred in Q1 2015, the Irish CSO had to delay its GDP revision, and redact the release of its regular economic data in 2016–2017 to protect the source's identity, as required by Irish law. Only in Q1 2018 could economists confirm Apple as the source and that leprechaun economics was the largest ever base erosion and profit shifting action, as well as the largest hybrid–tax inversion of a U.S. corporation.
  Leprechaun economics marked the replacement of Ireland's prohibited BEPS tool, the Double Irish, with the more powerful Capital Allowances for Intangible Assets tool, or "Green Jersey".
context_section_description: Economist Seamus Coffey is Chairman of the State's Irish Fiscal Advisory Council, and authored the State's 2017 Review of Ireland's Corporation Tax Code.  Coffey had analysed Apple's Irish structure in detail, and was interviewed by the international media on Apple in Ireland.  However, despite speculation, the suppression of regular economic data by the Irish Central Statistics Office meant that no economist could confirm the source of "leprechaun economics" was Apple.
  On 24 January 2018, Coffey published a long analysis on his respected economics blog, confirming the data now proved Apple was the source:
  We know Apple changed its structure from the first of January 2015.  This is described in section 2.5.7 on page 42 of the EU Commission's decision [on Apple's State aid case].  This would be useful but bar telling us that the new structure came into operation on the first of January 2015 everything else is redacted. Although the details of the new structure were not revealed it was still felt that Ireland was still central to the structure and maybe even more so with the revised structure.  Many of the dramatic shifts that occurred in Ireland's national accounts and balance of payments data were attributed to Apple but this was largely supposition – even if it was likely to be true.  Now we know it to be true.
  — Seamus Coffey, Economic Perspectives, University College Cork, 24 January 2018
  Coffey's January 2018 post also showed that Apple had restructured into the Irish Capital Allowances for Intangible Assets ("CAIA") BEPS tool.  Apple's previous hybrid–Double Irish BEPS tool had a modest effect on Irish economic data as it was offshore.  However, by onshoring their intellectual property ("IP") from Jersey, via the CAIA BEPS tool, the full effect of circa US$40 billion in profits that ASI was shifting by 2015 (see Table 1), would appear in the Irish national accounts; and was equivalent to over 20% of Irish GDP. The IMF began to correlate the effect of Apple iPhone sales on the Irish economic cycle.
  By April 2018, economists confirmed Coffey's analysis, and estimated Apple onshored USD 300 billion of IP from Jersey in Q1 2015 in the largest recorded BEPS action in history.  In June 2018, the GUE-NGL EU Parliament group published an analysis of Apple's new Irish CAIA BEPS tool, they labeled "the Green Jersey".
  On 17 February 2020, Krugman tweeted, "So Tim Cook is the leprechaun in leprechaun economics".
caption: Ireland: Balance of Payments (2012–17). Brad Setser & Cole Frank (Council on Foreign Relations)
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