Read more below. So, Ireland had tax rules that allowed Apple to use this loophole, and Apple has now been penalized (but not Ireland apparently). I’m not really ok with that. What if Ireland simply forgives Apple’s debt? Ireland has since closed the loophole however.
From https://www.reuters.com/technology/why-does-apple-have-pay-ireland-144-billion-2024-09-10/
LONDON, Sept 10 (Reuters) - Apple lost a long-running court battle with the European Union on Tuesday, resulting in the company being forced to pay 13 billion euros ($14.4 billion) in back taxes to Ireland, as part of a wider crackdown on so-called “sweetheart deals”.
WHAT HAPPENED?
In 2016, the European Commission’s competition chief Margrethe Vestager accused Ireland of having granted Apple illegal tax benefits, unfairly diverting investment away from other countries.
Both Apple and Ireland, whose low tax rates helped it attract Big Tech companies to set up their European headquarters, successfully challenged the EU ruling.
But the European Court of Justice has now sided with Vestager, agreeing Apple had unduly benefited from unfair loopholes in Ireland’s tax regime, and that the company must now hand Ireland 13 billion euros in back payments.
WHAT WAS THE ‘DOUBLE IRISH’ SCHEME?
Part of Ireland’s success in luring tech giants was a result of its old tax regime, under which multinational businesses were able to cut their overseas contributions to single digits.
The arrangement involved a complex corporate structure whereby a multinational could channel untaxed revenues to an Irish subsidiary which then pays the money to another company registered in Ireland but taxed elsewhere, such as tax haven Bermuda.
Both companies being Irish led to the term “Double Irish”.
Apple used a version of the Double Irish scheme until around 2014 when, under sustained pressure from the EU and U.S., Ireland closed the loophole.