‘Stateless’ Irish Apple unit filed accounts in Australia until 2009

Apple Sales International was identified in recent US Senate hearings as one of the US tech giant's "stateless" entities.

It emerged at those hearings that a number of Apple’s Irish entities managed to avoid paying corporation tax at all because they are not tax resident in any jurisdiction owing to a loophole in Irish tax law.

However, the first mention by Apple Sales International (ASI) that the company is stateless for tax purposes doesn't appear in its accounts until 2009. That is the final year for which figures were obtained by The Irish Times in Australia.

For each of the years until 2009, ASI’s accounts make reference to the corporation tax that would be due using a base of Ireland’s 12.5 per cent rate.

For example, the 2008 ASI accounts state €390 million of corporation tax would be due using the 12.5 per cent rate. The accounts then state €378 million was knocked off the bill after an adjustment for “income taxed at lower rates”. In 2007, the amount saved was €224 million, and €142 million in 2006.

In 2009, ASI began using Apple’s average global tax rate of 4 per cent as the base for its calculations, instead of 12.5 per cent.

The figures are likely to reignite the debate over multinationals’ use of Ireland to avoid corporation tax.

Last year, Apple told a US senate committee hearing into its tax affairs that it had a special tax deal as part of its decision to set up an Irish operation in 1980. This was later denied by the Government.

ASI was identified as one of the companies not tax-resident anywhere. It was explained by US politicians that profits of $74 billion had escaped tax anywhere since 2009 using Irish-based stateless entities.

Apple has been severely criticised in recent days Australia over its use of Ireland to avoid tax on profits earned there. An analysis of ASI's figures by the Australian Financial Review this week estimated Apple shifted almost nine billion Australian dollars (€6 billion) of its profits in that country to Ireland.

Apple declined to comment last night. The Department of Finance also declined to comment, but pointed out Minister for Finance Michael Noonan closed the "stateless" loophole in the October budget.