Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Ireland Announces Plan To Close Apple's Tax Loophole
Author: Scarinci Hollenbeck, LLC
Date: October 25, 2013
Key Contacts
Back
Following the announcement of several international tax agreements and a higher level of scrutiny over corporate tax strategies, Ireland recently announced its plans to close a tax loophole that a number of companies – most notably Apple, Inc. – have used to significantly lower their tax liabilities.
Ireland’s Department of Finance released a new report detailing its 2014 international tax strategies, in which it declared a “change to our company residence rules aimed at eliminating mismatches – that can exist between tax treaty partners in certain circumstances – being used to allow companies to be ‘stateless’ in terms of their place of tax residence.”
Currently, Apple runs all of its non-US income through two Irish companies, one of which is classified as a tax resident and domiciled in Ireland. The other, however, is not domiciled or considered a tax resident anywhere. Apple is then able to avoid paying roughly $40 billion in taxes by funneling money into the first Irish company, and then passing the funds over as royalties and fees to the second, which is not subject to any national tax jurisdiction, Forbes explained. Ireland’s new rule will make it illegal for any company registered in the country to maintain that “stateless” status to avoid taxes.
However, closing the loophole does not necessarily mean corporations will be required by law to pay higher taxes. In fact, many analysts agreed that nothing would likely change. Although Irish Finance Minister Michael Noonan said that the country will close the loophole, it will keep in place a provision that enables corporations to nominate any country they prefer as their tax residence, according to Reuters. This includes popular zero tax jurisdictions, such as Bermuda, which is a prime choice for companies such as Google, Amazon, and other tech giants.
- Practices: Tax and Trusts & Estates, Corporate Transactions & Business, International Law & Trade
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together
New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]
Author: Sean M. Pena
Eviction Is Not Always the End: Understanding Post-Possession Rent Claims in New Jersey and New York
No. An eviction does not automatically end a tenant’s obligation to pay rent. Post-eviction rent claims are common because recovering possession resolves who has the right to occupy the premises, but it does not extinguish the tenant’s contractual obligations under the lease. Whether unpaid or future rent remains owed depends on three factors: the lease’s […]
Author: Donald M. Pepe
Company Dissolved? Legal and Financial Consequences to Expect
A company is dissolved; legally, it ceases to exist. Accordingly, dissolution results in significant legal and financial consequences. It is a process that must be properly managed to avoid continuing liability. The Corporate Dissolution Process Corporate dissolution is the legal process of formally closing a corporation, paying its debts and distributing the remaining assets. Most […]
Author: Jay McDaniel
The Legal Implications of Signing a Triple Net Lease
A triple net lease is a commercial lease in which the tenant pays the property’s real estate taxes, insurance, and maintenance costs, known as the three nets, in addition to base rent. They are most often used in freestanding retail and office buildings and in large single-tenant industrial properties, with terms that typically run 10 […]
Author: Donald M. Pepe
When to Settle and When to Fight: A Litigator's Framework
Every lawsuit comes with a cost, and knowing when to settle a lawsuit is one of the most consequential decisions a business owner will face. Experienced litigators understand how to minimize cost and obtain certainty for their clients. For many business owners, the decision is viewed almost entirely through a financial lens: What will it cost […]
Author: Sean M. Pena
Types of Business Law Services Companies Actually Use
Business law services are legal services that help companies form, operate, transact, protect assets, manage risk, and resolve disputes. The phrase can sound broad because it is broad. A company may need help with entity formation one month, contract review the next, a commercial lease after that, and a business dispute later in the year. […]
Author: Scarinci Hollenbeck, LLC
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.