Sales at Apple’s Irish holding company rise 13.1% to $155.8bn

Sales at Apple’s Irish-registered international holding company rose 13.1 per cent to $155.8 billion (€141 billion) in 2018, up from $137.8 billion a year earlier, new accounts filed by the company show.

Apple Operations International (AOI), which is registered to the company's Holyhill campus in Cork, covers most of Apple's non-US subsidiaries. It manufactures and develops everything from the company's iPhone and iPad products to Mac computers and audio devices to its software and digital content through the App Store and Apple Music service.

The accounts show a tax charge of $6.66 billion on net income of more than $40 billion across a number of countries where Apple operates. The figure excludes US-based taxes, including that paid on the $37 billion repatriated by the company under changes made to the US tax system under Donald Trump. The accounts do not show that corporate tax paid in Ireland and the charge is to take account of expected payments across a number of jurisdictions.

The $6.66 billion tax bill equates to an effective tax rate of 14 per cent.

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Expenses

Operating expenses rose to $16.3 billion for the year, with research and development costs rising to $7.2 billion and staff costs rising to $3.96 billion as the company added some 2,000 new staff across its subsidiaries to bring the total number employed to 43,325 in 2018. Some 6,000 of those employees are based in Ireland.

“We’ve been operating in Ireland since 1980 and we’re proud of the many contributions we make to the economy and job creation. Over the last four years, we’ve spent more than €1.3 billion with local companies and our investment and innovation supports more than 27,000 jobs up and down the country,” Apple said in a statement.

“As the largest taxpayer in the world, we know the important role tax payments play in society. Since 2008 Apple’s corporate taxes have totalled over $100 billion. We pay all that we owe according to tax laws and local customs wherever we operate,” it added.

In 2017 the company said it had paid €1.5 billion in corporate profits tax to the Irish exchequer over the previous three years.

In 2016, the European Commission found that Apple had benefited from illegal state aid in the Republic, and ordered it to pay €13 billion in taxes and penalties it said were owed. That money was paid into an escrow account pending the conclusion of pending appeals of the decision by the company and the State, who both claim the commission erred in its judgment.

EU directive

This is the first time in several years that AOI has filed accounts with the Irish Companies Registration Office. Under previous rules, it wasn’t required to file accounts, but an EU directive that came into force for the company’s fiscal year 2018 changed that. Apple has a number of other subsidiaries in Ireland, including its operating companies Apple Operations Europe and Apple Distribution International. It is understood that the consolidated accounts cover the eight subsidiaries.

The company reorganised its structure in 2015 following changes in the Irish tax rules. At the time it said it moved the company which holds its overseas cash earnings to Jersey.