& Cole Frank (
Council on Foreign Relations)
2018 filings Economist
Seamus Coffey is Chairman of the State's
Irish Fiscal Advisory Council, and authored the State's 2017 ''Review of Ireland's Corporation Tax Code''. Coffey had analysed Apple's Irish structure in detail, and was interviewed by the international media on Apple in Ireland. However, despite speculation, the suppression of regular economic data by the Irish Central Statistics Office meant that no economist could confirm the source of "leprechaun economics" was Apple. On 24 January 2018, Coffey published a long analysis on his respected economics blog, confirming the data now proved Apple was the source: & Cole Frank (
Council on Foreign Relations) Coffey's January 2018 post also showed that Apple had restructured into the Irish
Capital Allowances for Intangible Assets ("CAIA") BEPS tool. Apple's previous hybrid–
Double Irish BEPS tool had a modest effect on Irish economic data as it was
offshore. However, by
onshoring their
intellectual property ("IP") from Jersey, via the CAIA BEPS tool, the full effect of circa US$40 billion in profits that ASI was
shifting by 2015 (see Table 1), would appear in the Irish national accounts; and was equivalent to over 20% of Irish GDP. By April 2018, economists confirmed Coffey's analysis, and estimated Apple
onshored USD 300 billion of IP from Jersey in Q1 2015 in the largest recorded BEPS action in history. On 17 February 2020, Krugman tweeted, "So Tim Cook is the leprechaun in leprechaun economics".
Further concerns reversed the benefits
Noonan gave Apple's 2015 CAIA BEPS scheme, but only applied it to new schemes. The November 2017
Paradise Papers leaks, documented how in 2014, Apple and its lawyers,
offshore magic circle firm
Appleby, looked for a replacement for Apple's Irish hybrid–Double Irish BEPS tool. The leaks showed Apple considering a number of
tax havens, especially Jersey and Ireland. Some of the documents demonstrated that tax avoidance was the driver of Apple's decision making. Experts noted that it is prohibited under Ireland's tax code (Section 291A(c), Taxes and Consolation Act 1997), to use the CAIA BEPS tool for reasons that are not "commercial bona fide reasons", and in schemes where the main purpose is "... the avoidance of, or reduction in, liability to tax". In November 2017, the Irish media noted that the then Finance Minister
Michael Noonan, had increased the tax relief threshold for the Irish CAIA BEPS scheme from 80 per cent to 100 per cent in the 2015 budget, which would reduce the
effective Irish corporate tax rate on the CAIA BEPS tool from 2.5 per cent to 0 per cent. This was changed back in the subsequent 2017 budget by the new Finance Minister
Paschal Donohoe, however firms which had started their Irish CAIA BEPS tool in 2015, like Apple, were allowed to stay at the 100 per cent relief level for the duration of their scheme, which can, under certain conditions, be extended indefinitely. In January 2018, when
Seamus Coffey and others, estimated that since the Q1 2015 restructuring, Apple avoided Irish taxes of €2.5–3bn per annum, based on the 0%
effective tax rate Noonan introduced for the CAIA scheme in the 2015 budget. Coffey estimated that a second EU Apple State aid fine for the 2015–2018 (inclusive) period, could reach over €10bn, excluding interest penalties, adding to Apple's existing €13 billion EU fine for the 2004–2014 period.
Impact on taxation In July 2016, financial commentators were confused that Ireland had incurred €380 million per annum in additional EU GDP levies (earlier), but given Apple (in the 2015 budget, per above), an
effective tax rate of 0% for the Apple IP that was
onshored. Some pointed to the benefits of "leprechaun economics" to Ireland's credit rating, and Debt-to-GDP metrics. In August 2016, however, Apple CEO
Tim Cook, stated that Apple was now "the largest tax payer in Ireland". The report also showed that "intangible allowances", which are claimed under the CAIA BEPS tool, jumped by over 1,000 per cent, or €26.2 billion in 2015 (from €2.7 billion in 2014), which was consistent with the euro amount of profits that Apple's ASI was
shifting through its hybrid–Double Irish BEPS tool at the time. This is consistent with 2018 research showing that the "Green Jersey" is the largest BEPS tool in the world. However, in the absence of confirming data, Coffey is reluctant to draw a parallel between the dramatic 2015 rise in Irish corporation tax receipts, which has carried into 2016, and any potential change of tax strategy by Apple from the additional EU scrutiny into Apple's Q1 2015 restructure. In May 2019,
The Times reported that IMF experts, including Erik De Vrijer, Director of the IMF's European department, expressed concern about the lack of official understanding about the driver in the dramatic rise in Irish corporation tax receipts since 2014, and the implications for long-term State spending. Section 815A of the
1997 Tax Acts prevents disclosure of Irish taxation data, even to other officers of the Irish State, outside of the Irish
Revenue Commissioners. ==Reverse leprechaun taxes (2019)==