Apple's BEPS restructuring via Ireland's CAIA tool caused a 26.3% artificial spike in Irish 2015 GDP, exposing Ireland as the world's largest tax haven.
Key Facts
- Irish GDP artificial rise (2015)
- 26.3% (revised to 24.6%)
- EU fine on Apple's Double Irish
- €13 billion EUR
- Irish GDP vs GNI* ratio (2017)
- 162%
- IMF phantom FDI estimate (2019)
- 60% of Irish foreign direct investment
- CSO publication date
- 12 July 2016
- Term coined by
- Paul Krugman
By the Numbers
Location
Cause → Event → Consequence
Apple restructured its tax arrangements in Q1 2015, migrating from the Double Irish hybrid-tax tool — subject to an EU Commission investigation resulting in a €13 billion fine in August 2016 — to Ireland's Capital Allowances for Intangible Assets (CAIA) tool. This shifted vast intangible asset values onto Irish national accounts, representing the largest base erosion and profit shifting action ever recorded.
On 12 July 2016, Ireland's Central Statistics Office published restated 2015 national accounts showing a 26.3% rise in GDP, later revised to 24.6%. Economist Paul Krugman coined the term 'Leprechaun economics' to describe the distortion. The CSO had redacted regular data releases to protect Apple's identity under Irish law, and Apple was only confirmed as the source in Q1 2018.
Ireland was blacklisted by Brazil in September 2016, becoming the first major tax haven sanctioned by a G20 economy. Ireland replaced GDP with Modified GNI* in 2017 to better reflect its actual economy. The US and EU introduced BEPS countermeasures in December 2017, and Ireland introduced a reverse tax on intellectual property exits in 2018. Academics concluded Ireland had become the world's largest tax haven.