Ireland to close tax loophole used by Apple

Ireland plans to close a loophole used by Apple and other firms to avoid paying taxes.

15:10 16 October 2013

In May, a US Senate Committee said that Apple had utilized "a complex web of offshore entities" to avoid paying taxes in the United States that could amount to billions of dollars. Now, Ireland’s Finance Minister Michael Noonan said that his country plans to close a loophole used not just by Apple but also other firms to avoid paying the right taxes.

Currently, giant companies are able to funnel profits into Irish subsidiaries or ghost companies that had no declared tax residency anywhere in the world.

Noonan said: "Let me be crystal clear. Ireland wants to be part of the solution to this global tax challenge, not part of the problem.”

The Irish government also said on Tuesday that it will make it illegal for a company to have no tax domicile. However, companies will be able to nominate any country as their tax residence. Experts say that this will not make a huge difference to the amount of tax paid by Apple as they could just switch tax countries.

Microsoft and Google have Irish subsidiaries that legally channel money to Bermuda where they pay zero tax.