Apple’s $14.5 Billion Tax Bill That It Really, Really Doesn't Want To Pay

Do you think it's fair that corporations can move their offices offshore to avoid tax bills? 


In 2014, Apple paid 0.005% taxes on its international profit, and has averaged a 1% tax rate over the 25 years it's had an international headquarters in Ireland.

It’s precisely why the company has an office there — to avoid paying taxes that the European Union now says it owes, in addition to interest on international sales. It also manages to avoid paying taxes in the United States on those same international sales. The country it uses for its headquarters — Ireland — specifically recruits companies so that they can pay almost nothing. 

Here's an infographic from the European Commission that demonstrates the shell game aspects of how the money flowed. Or, rather, didn't.


Apple's own annual report claims something else entirely, stating that:

“substantially all of the company’s undistributed international earnings intended to be indefinitely reinvested in operations outside the US were generated by subsidiaries organized in Ireland, which has a statutory tax rate of 12.5 percent.” 

The European Union (E.U.) figured it out, and has now told Apple that it owes $14.6 billion in taxes, and interest on that as well.

Apple doesn’t want to cover the tax bill, nor the penalties, but it might just have to; the Commissioner of Competition in the E.U. stated, simply, “This is illegal under E.U. state aid rules.” And Apple has the cash on hand — $187 billion outside of the U.S. right now.  

Apple basically responded with (paraphrasing … of course!) “Nice corporate tax haven with thousands of jobs we’ve got going here… sure would be a shame if something… err, ummm, happened to it.”

Which means Ireland really doesn’t want to charge the tax, because it might lose the thousands of workers that are there now, as well as other companies with similar setups. 

At a time when in the United States — and in much of Europe for that matter — schools are underfunded, roads and bridges are crumbling, and city infrastructure accounts are basically bankrupt, should we allow companies to do what Apple is doing? 

If we allow them to do so, then what's to stop all companies from heading to countries like Ireland and other locations across the world to escape taxes?

And if we don't allow tax havens like these, does it kill businesses and otherwise impede growth? 

Economist Robert Reich has some thoughts about that here: 

Robert Reich is on Facebook, and his books and some videos are available here

Thumbnail image Creative Commons Licensed. 

Compelling speakers do these 4 things every single time

The ability to speak clearly, succinctly, and powerfully is easier than you think

Former U.S. President Barack Obama speaks during a Democratic Congressional Campaign Committee rally at the Anaheim Convention Center on September 8, 2018 in Anaheim, California. (Photo by Barbara Davidson/Getty Images)
Personal Growth

The ability to communicate effectively can make or break a person's assessment of your intelligence, competence, and authenticity.

Keep reading Show less

How long to learn that language? Here’s a map for that

How the U.S. teaches foreign languages to its diplomats. 

popular

For English-speakers, Romanian is easier to learn than German. And you’ll be speaking Russian sooner than Hungarian.

Keep reading Show less

How 'dark horses' flip the script of success and happiness

What defines a dark horse? The all-important decision to pursue fulfillment and excellence.

Big Think Books

When we first set the Dark Horse Project in motion, fulfillment was the last thing on our minds. We were hoping to uncover specific and possibly idiosyncratic study methods, learning techniques, and rehearsal regimes that dark horses used to attain excellence. Our training made us resistant to ambiguous variables that were difficult to quantify, and personal fulfillment seemed downright foggy. But our training also taught us never to ignore the evidence, no matter how much it violated our expectations.

Keep reading Show less