Apple subsidiary paid penalties in Irish tax settlement in 2014

An Apple subsidiary made a tax settlement, including interest and penalties, with the Irish Revenue Commissioners two years ago, the European Commission revealed, as it published details of its €13 billion tax finding against the iPhone-maker in Ireland.

Apple Distribution International (ADI), which was incorporated in Ireland in 2009, assumed certain responsibilities three years later for distributing the group's products in Europe, the Middle East, India and Africa. Since 2014 it is in charge of sales, distribution, and Apple online store activities across these regions and China.

Despite declaring profits, including between €100 million and €200 million of profits in 2011, ADI declared no corporation tax liability for 2009, 2010 and 2011, according the commission report.

Tax resident

However, the Revenue Commissioners took the view that because ADI was tax resident in Ireland it could not benefit to the same extent as other Apple units in the State which were able to split profits between local branches and Irish-based entities that were “stateless” for tax residency purposes.

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“In 2014, ADI accepted Irish Revenue’s position and a settlement was reached ...for all accounting periods up to and including 2012,” the commission said in the 130-page document on Apple’s tax dealings in Ireland.

The size of the settlement and interest and penalties was redacted from the document.

The tax settlement took place a year after the commission began to request details of Apple’s tax affairs in the Republic.

Brussels decided to open a formal investigation in June 2014, into two tax “rulings” issued by the Revenue Commissioners in 1991 and 2007 in favour of two Irish units of the group, Apple Sales International and Apple Operations Europe.