Why Apple still paid a ridiculous tax in France in 2021

Our colleagues from Challenges report that Apple paid only 3.7 million euros in taxes in France in 2021 (fiscal year ending on September 30). An amount slightly higher than that of the year 2020 at the end of which Apple Retail France had paid only 2.8 million euros in taxes. The apple firm even seems to have suffered from a drop in its turnover in France from one year to the next.

It must be said that on paper, it is clear that Apple has seen its turnover drop from 708 million euros in France to only 565 million euros in 2021. But you have to read between the lines… because in reality, Apple has never sold so many smartphones, computers and other products. In fact, during the pandemic, a union representative quoted by Challenges tells us, Apple has developed a very effective tax optimization strategy.

Apple paid less than 4 million euros in taxes in France in 2021 thanks to a well-established trick

Not that this is new: Apple is already optimizing everything to pay very little tax in the countries where the brand is present. In Europe, the bulk of business is taxed in Ireland where Apple has its international operations headquarters. The advantage for the firm is that Ireland has a particularly accommodating tax system.

In 2021, Apple Operations International Ltd (the name of the Irish branch of the firm) thus declared 65.2 billion euros in turnover. Which earned him to pay 8.13 billion euros in taxes to Ireland in 2021. The figure is up very sharply compared to the previous year – at the end of which Apple had not paid than 2.593 billion euros in taxes.

In reality, during the pandemic, Apple simply reassigned many employees when 17 of the 20 Apple Stores in the territory had to close temporarily. These employees have for the occasion “changed jobs” so as to rather make sales by telephone or encourage customers to buy directly via the Apple.fr site.

Revenue from sales made by telephone and via the internet is declared by the Irish subsidiary. This allows the firm to benefit from a much more attractive rate than in France, even if it means depriving the State of far from negligible tax revenue. Despite the reopening of Apple Stores and the end of the pandemic, Apple seems to be pursuing the same optimization strategy.

This explains how the demand for Apple products can remain so high while at the same time the firm declares results in sharp decline – and allows itself to pay France only a few rather derisory millions of euros. However, fortunately, the situation will not last forever: a new tax targeting multinationals first signed by the members of the G7 (France, United Kingdom, Canada, Germany, Italy, Japan and the United States) then at the end of 2021 by the members of the G20.

Also read – Apple had to repay 13 billion euros in taxes. This is no longer the case

The agreement will impose on Apple, as on all firms generating a turnover of at least 750 million euros, a tax of 15% which the companies in question will no longer be able to escape from 2023. Apple therefore still seems to be playing the watch before the ax ends up falling… unless by then, the firm’s talented tax specialists end up finding a way out.

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