Apple would need to sell 12.6million new iPhone 16s just to cover their whopping Irish tax bill after court ruling

Apple has to sell 12.6 million of their new iPhone 16s to cover the costs of losing their court challenge over paying taxes in Ireland.

The tech giant has been ordered to pay out € 13 billion (£10.97bn) to the Irish government in unpaid taxes after losing a court battle against the order from the European Union.

To recoup the total amount, investment analytics platform Stocklytics has calculated Apple will need to sell 16.m of their newly-launched iPhone 16 handsets to plug the hole in their finances.

That is around 4 million MORE phones than Apple’s total amount of iPhone handsets sold in Britain across the whole of 2023.

Apple had fought the ruling first made back in 2016 through the courts, but the final verdict this week made it clear they were liable for the back taxes due to the Irish government.

It means the money, held in escrow while the proceedings continued, will have to be handed over to comply with the court’s decision.

*iPhone prices calculated as an average of handset prices at €1,000 (£845)

FAQs

1. Why does Apple owe so much in taxes to Ireland?

Apple was ordered by the European Commission in 2016 to pay €13 billion in back taxes to Ireland after it was found that the company had been benefiting from an illegal tax deal. The ruling claimed Apple was paying a significantly lower tax rate than other businesses, effectively receiving state aid. After years of legal battles, the court’s final decision requires Apple to pay the owed amount.

2. How will this tax bill impact Apple’s finances and future plans?

While €13 billion is a large sum, Apple’s cash reserves are substantial, estimated to be over $200 billion. However, selling an estimated 12.6 million additional iPhone 16 units would help recoup the loss. While this tax bill may not significantly derail Apple’s financial stability, it could influence pricing strategies or future financial planning.

3. How might this ruling affect other multinational companies operating in Ireland?

This ruling sets a precedent, signaling that the European Union is serious about addressing tax avoidance practices. Other multinational corporations with similar arrangements in Ireland or elsewhere may face increased scrutiny or legal challenges, potentially leading to higher tax liabilities or altered business practices to comply with EU tax regulations.