Apple’s Irish tax threat: What you need to know

August 30, 2016 8:11 AM

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Apple’s Irish tax threat: What you need to know

Following two tax rulings from Irish officials, one in 1991 and one in 2007, Apple, which employs around 5,500 people in Ireland in its European headquarters, gained an extremely low tax rate on its European earnings. The European Commission believes that this so-called "sweetheart" deal gave Apple an unfair advantage compared to other companies, and constitutes a breach of state aid rules.

In recent years, Apple has paid a tax rate of less than 1 percent on some of its European sales, via a complicated tax structure whereby its intellectual property is held in Irish subsidiaries, which are not resident anywhere under the U.S. definition of the term. This compares to the more usual 12....

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