ITEP Senior Fellow Matthew Gardner talks to All Things Considered reporter Jim Zarroli about Apple’s tax avoidance schemes.
JIM ZARROLI: Apple has made hundreds of billions of dollars around the world, and it has sometimes taken extraordinary measures to avoid paying taxes on it. Last year, the European Union fined Apple $14 billion because of an illegal tax deal it struck with the Irish government. Matt Gardner of the Institute on Taxation and Economic Policy says the deal involved something called the double Irish tax loophole.
MATT GARDNER: The first thing I know about the double Irish is that technically it no longer exists. Ireland got rid of it in 2014 in response to an outcry from the U.S. and other governments.
ZARROLI: But while the loophole existed, it worked like this. Ireland would allow companies such as Apple to set up two subsidiaries. One made a modest profit and paid taxes, but most of the money Apple made in Europe went to a second subsidiary based in the tax haven of Bermuda.
GARDNER: Ireland had a strange set of tax rules that said if you’re a company incorporated here but operated from somewhere else, we’re not going to tax certain types of income.