Apple paying €50 corporation tax in Ireland on every €1m of profit reported – a rate of 0.005 per cent – was in compliance with local laws, the Emerald Isle’s under-fire Revenue Commissioners have claimed.
The tax collectors issued a statement in the wake of the European Commission's damning verdict that tax arrangements between the multinational corporation and Ireland breached the EU’s state aid laws, and €13bn in back taxes are owed.
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“We have provided all relevant information and explanations to the commission,” said Niall Cody, chairman of the Revenue Commissioners. “These demonstrate that Revenue collected the full amount of tax due from Apple in accordance with Irish tax law. The issue of international tax planning, involving mismatches between different countries’ tax rules, is well known and is the subject of the OECD BEPS Project.”
This is the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting (BEPS) scheme aimed at closing tax avoidance loopholes globally.
The EU’s investigation revealed Apple paid an effective corporation tax of one per cent in 2003 but by 2014 – when the European Commission launched the probe – this rate had fallen to 0.005 per cent.
The iMaker has re-routed 90 per cent of its profits outside of the US to its Irish subsidiaries, Apples Sales International and Apple Operations Europe, as they hold the rights to the firm’s intellectual property.
The €13bn tax sum owed by Apple is not a penalty but a sum of taxes owed that the Revenue Commissioners must now seek to recover, the EU stated this morning.
Cody added that under Irish tax law, “non-resident companies are chargeable to Irish corporation tax only on the profits attributable to their Irish branches by reference to the facts and circumstances.
“The profits of non-resident companies that are not generated by their Irish branches – such as profits from technology, design and marketing that are generated outside Ireland – cannot be charged with Irish taxes under Irish tax law.”
The Revenue Commissioners further stated Apple had confirmed on the public record that its “relevant” companies were not tax-resident in Ireland.
Cody said there was “no departure” from Irish tax law in its treatment of Apple’s tax payment, there was “no preference” in applying that law and “full tax due” was coughed in accordance with Irish law.
Wasn’t there an old phrase penned by Charles Dickens about the law being an ass? Yes, there was.
Apple has so far resisted the temptation to send The Reg a comment on the whole sorry saga. ®