Apple has always found the profitable route that benefits the company the most. So can be seen by their clever tactic to place their headquarters in one of the lowest tax paying countries – Ireland. However, all of this has come to an end as Ireland will now have to pay 15% tax instead of the regular 12.5%.
This change has been made public for a while now however what's new is that this increment was supposed to take place in 2023, but has been delayed to 2024, which is great news for Apple. The reason behind this change is the slow progression of the global tax fiasco.
Apple has smartly chosen Ireland to be its headquarters for one main reason. The amount of tax to be paid in Ireland is much lower than those of different countries. A few countries, along with Ireland have a tax rate as low as 12.5% while most countries have it much higher. What’s astonishing is that Apple isn’t the only sly one here, Google’s headquarter is based in Ireland too, walking on the same path as Apple.
Financially, this is a great move for Ireland’s economy. Since Ireland has little to offer in terms of generating money, it is great to have tech giants choose the region as their base. However, this does mean other countries won’t have the same benefits as Apple manages all of its taxes through Ireland and not any other European countries.
While the US asked for the corporate tax to be increased up to 21%, no one agreed to tax demand. The tax was agreed to be raised globally only to 15% by the G7 nations. This deal was first announced by the OECD (Organization for Economic Cooperation and Development) in 2019 with negotiations starting in 2020. The plan was decided to be executed in 2023, however, it got pushed back to 2024.
The plan originally had 3 major goals which include every company to be paying tax where they choose to sell/buy goods from, companies paying the minimum tax rate, and digital goods being taxed in the customer's country.
Furthermore, OECD confirmed that the early timeline was just a ploy to get the pressure on however the tactic failed. The slow progression of the tax deal is natural and is continuing at its timeline. To make matters worse, the US is posing several obstacles in the way including the need to get Congress's approval before any further action.
Whether the US will agree to these demands is yet unknown. We are all very curious as to how this change will affect Apple’s profits.
Read next: Apple Proves How Successful Its App Economy Has Been Under Its Reign With 2.2 Million Jobs In The US
This change has been made public for a while now however what's new is that this increment was supposed to take place in 2023, but has been delayed to 2024, which is great news for Apple. The reason behind this change is the slow progression of the global tax fiasco.
Apple has smartly chosen Ireland to be its headquarters for one main reason. The amount of tax to be paid in Ireland is much lower than those of different countries. A few countries, along with Ireland have a tax rate as low as 12.5% while most countries have it much higher. What’s astonishing is that Apple isn’t the only sly one here, Google’s headquarter is based in Ireland too, walking on the same path as Apple.
Financially, this is a great move for Ireland’s economy. Since Ireland has little to offer in terms of generating money, it is great to have tech giants choose the region as their base. However, this does mean other countries won’t have the same benefits as Apple manages all of its taxes through Ireland and not any other European countries.
While the US asked for the corporate tax to be increased up to 21%, no one agreed to tax demand. The tax was agreed to be raised globally only to 15% by the G7 nations. This deal was first announced by the OECD (Organization for Economic Cooperation and Development) in 2019 with negotiations starting in 2020. The plan was decided to be executed in 2023, however, it got pushed back to 2024.
The plan originally had 3 major goals which include every company to be paying tax where they choose to sell/buy goods from, companies paying the minimum tax rate, and digital goods being taxed in the customer's country.
Furthermore, OECD confirmed that the early timeline was just a ploy to get the pressure on however the tactic failed. The slow progression of the tax deal is natural and is continuing at its timeline. To make matters worse, the US is posing several obstacles in the way including the need to get Congress's approval before any further action.
Whether the US will agree to these demands is yet unknown. We are all very curious as to how this change will affect Apple’s profits.
Read next: Apple Proves How Successful Its App Economy Has Been Under Its Reign With 2.2 Million Jobs In The US
