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Thread: Barclays: Changes to Tax Laws in Ireland is a "Minor Issue" for Apple

  1. #1
    What's Jailbreak? Akshay Masand's Avatar
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    Default Barclays: Changes to Tax Laws in Ireland is a "Minor Issue" for Apple


    Although Ireland is set to close its tax loopholes in January of 2015, the changes won’t be applied to Apple and others until the year 2020. This results in a “relatively neutral” outcome for AAPL shareholders according to Barclays. Analyst Ben A. Reitzes characterized the upcoming changes to close the so-called “Double Irish” tax loophole as a “minor issue” for Apple. He believes that the temporary relief balances against the slightly lower long-term earnings power since the effect is coming in 2020.

    To provide more insight into the matter, Apple paid $1.1 billion on foreign taxes on $30.5 billion in overseas pretax earnings. This resulted in a tax rate of roughly 4% thanks to the tax loopholes in Ireland. That being said the Irish statutory tax rate is actually 12.5%. If that rate wre to be applied, Reitzes estimates that the company’s earnings would come down by about 7%.

    With the tax issue addressed, what Rietzes seems more concerned about was whether the European Union would decide to impose a fine on Apple and others for its tax strategies. Just last month, the legislative arm of the EU announced that it believes Apple received special treatment from Ireland in the form of tax agreements that could be viewed as illegal.

    Unsurprisingly, Apple responded to the issue denying dodging EU tax laws or receiving special treatment from Irish authorities. The Cupertino California company event went as far as stating that it “pays every euro of every tax” that it owes. Despite all the news, Barclays maintains its “overweight” rating for AAPL stock with a price target of $116. Reitzes continued by stating the following regarding AAPL stock:

    Supported by margin upside, large stock repurchases and a growing dividend, we believe Apple's shares can outperform in a very tough tape.
    How do you feel about all of the news regarding the tax loopholes changing? Do you think it'll have a big effect on AAPL stock? Share your thoughts and opinions below!

    Source: Barclays via AppleInsider

    Twitter: @AkshayMasand

  2. #2
    Until everyone else follows suit and Apple will need to think of a legitimate way to make money.

  3. #3
    Looks like Ireland does not want your money Apple time to move it to a country that will appreciate it

  4. #4
    Apple should just create its own country and make its tax rate 0.0%.

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