Aggressive Tax Planning Schemes: the case of Apple

Abstract

Purpose: This study analyses Apple’s tax planning through Irish structures like the Double Irish and Green Jersey, highlighting how the company used legal loopholes and mismatches to lower its global tax bill. It also examines the responses of international organizations, especially the European Commission and the Organisation for Economic Co-operation and Development.

Methodology: A qualitative documentary analysis of official reports and academic sources was used to examine Apple’s tax arrangements, the impact of Irish tax rulings, and the legislative reforms that led to changes in its corporate structure.

Results: The research shows that Apple benefited from Irish tax rulings that allocated profits to head offices, which have no physical presence, resulting in greatly reduced tax rates. Although legal at the time, these arrangements exploited tax mismatches and raised state aid concerns. Under regulatory pressure, Apple shifted to the Green Jersey model, continuing to benefit from Irish tax incentives such as capital allowances and research and development tax credits.

Research limitations: The study has faced some limitations due to its reliance on public sources, the difficulty in accessing confidential internal documents and keeping up with the evolution of tax legislation.

Practical implications: Findings underscore the need for enhanced international tax coordination and the reform of tax ruling practices.

Originality: By offering a comprehensive case analysis, the paper highlights how formally legal tax planning can challenge fiscal fairness and transparency, emphasizing the urgency of global tax harmonization.

Keywords: Aggressive tax planning; Double Irish; Green Jersey; Tax rulings; Intellectual property.

DOI: https://doi.org/10.58869/EJABM11(3)/05