Apple's main Irish unit incurs €23.2bn corporation tax charge

Gordon Deegan

The main Irish subsidiary of tech giant Apple incurred a $25.2 billion (€23.2 billion) corporation tax charge last year, according to new accounts.

The Cork-based Apple Operations International Ltd (AOIL) filed accounts showing that $15.84 billion of the corporation tax charge arose from a European Court of Justice decision that the Irish State gave it undue tax benefits, contrary to EU state aid rules.

The accounts show that AOIL paid out $8.84 billion in cash in corporation taxes for the 12 months to the end of September last year.

Pre-tax profits at AOIL last year increased by 7 per cent, from $71.07 billion to $76.36 billion, as revenues increased marginally by 1.5 per cent, from $218.89 billion to $222.3 billion.

The company’s post-tax profits totalled $51.15 billion following the $25.2 billion corporation tax charge.

Post-tax profits decreased by 18 per cent from $62.28 billion in the prior year.

A note concerning the European Court of Justice decision stated that as a result, AOL recorded a one-time income tax charge of $14.8 billion, which represents $15.8 billion payable to Ireland via release of the escrow and a decrease in uncertain tax position of $1 billion.

AOIL is registered at the company’s Holyhill campus in Cork and covers most of Apple’s non-US subsidiaries.

The company acts as a holding company for a number of Apple subsidiaries. It manufactures and develops everything from the company’s iPhone and iPad products to Mac computers.

The group has international operations with sales outside Ireland representing a majority of the group's net sales.

The new consolidated accounts show that the business last year paid dividends of $67.62 billion to Apple Inc, which was down sharply on the dividends of $92.2 billion in the prior year.

The accounts do not disclose corporate tax paid in Ireland, but say that a 12.5 per cent corporate tax charge would have resulted in corporation taxes of $9.5 billion.

The filing does not say where the tax was paid but the greatest share is likely to have been paid here, where the company is based.

Numbers employed at AOIL and subsidiaries last year totalled 55,827 and some 6,000 of those employees are based in Ireland.

Staff costs totalled $7 billion, including share-based compensation of $1.73 billion.

The company’s cost of sales last year totalled $120.2 billion, resulting in a gross profit of $102 billion.

The group’s research and development costs last year totalled $16.92 billion.

AOI’s shareholder funds at the end of September last year amounted to $47.96 billion.

The group’s cash funds decreased marginally to $17.85 billion.