Thursday 18 December 2014

We don't do special tax deals, says Kenny

Peter Flanagan and Fionnan Sheahan

Published 22/05/2013 | 05:00

Apple CEO Tim Cook testifies at a Senate homeland security and governmental affairs investigations subcommittee hearing
Apple CEO Tim Cook testifies at a Senate homeland security and governmental affairs investigations subcommittee hearing
Chairman of the Senate homeland security and governmental affairs investigations subcommittee Carl Levin (D-MI) and ranking member John McCain
Apple Operations International, a subsidiary of Apple Inc, in Hollyhill, Cork,

THE Government has fiercely denied Apple pays a special tax rate here even as US politicians, and the head of Apple itself, claimed just such a rate existed.

The powerful US Senate Subcommittee for Investigations claimed the Irish Government had arranged a special deal with Apple to tax its profits at a special 2pc rate, instead of the normal 12.5pc corporation tax rate.

According to the committee, Apple has used this deal to legally avoid paying billions of dollars on its profits around the world.

In response to questions from the committee in Washington yesterday, Apple chief executive Tim Cook said the Irish Government offered a special deal when it opened its offices in Cork more than 30 years ago.

"The Irish Government gave us a tax incentive agreement to set up there in 1980," he said.

Taoiseach Enda Kenny, however, rejected any suggestion such a deal was in place today.

"Ireland does not, let me repeat, does not do special tax deals with companies," he said.

"There is no possibility of individual special tax deals," he added.

At dramatic hearings in Washington, US senators Carl Levin and John McCain hammered Apple for using Ireland as a tax shelter, claiming one Apple subsidiary incorporated here paid no tax anywhere on more than $30bn (€23.3bn) of revenue between 2009 and 2012.

Another subsidiary incorporated in Ireland paid a tiny fraction – just five-hundredths of one percent in 2011 – on total reported income of $74bn (€57bn) over the same period.

In 2012 alone, Apple used Ireland to avoid paying $9bn (€7bn) in US taxes, said Mr Levin.

Mr Kenny, however, said Ireland's tax rate was clear and consistent and the country was an "active participant" in international efforts to reduce base erosion and profit shifting.

INTERPRETATION

He also said Ireland was one of the first countries to sign up to an agreement with the US on tax compliance.

Following Mr Cook's testimony, a government spokesman said Mr Kenny's statement stands and there was no special deal for any company.

Coalition sources said the Government can't account for how Mr Cook interprets the corporation tax law, but there are no special deals. A spokesman for the Revenue Commissioners also said they did not do "special tax rate deals with companies".

"We are not a tax haven," Mr Kenny declared.

Mr Levin, however, disagreed, explicitly calling Ireland a "tax haven" and claiming it was wrong that companies like Apple could use this country to minimise their tax liability.

"To have a situation that a company can shift its profits to a tax haven, which is what Ireland is, is not right," Mr Levin said.

Mr Kenny did acknowledge that tax evasion and fraud on an international level will be a "priority" issue at the G8 summit of world leaders in Co Fermanagh next month.

He said EU member states retaining the right to decide taxation rules allows countries to "take account of their differing positions in the economic and business cycles.

"It is clear, however, that when it comes to combating tax evasion and fraud, there is a great deal that can and ought to be done," he added.

Irish Independent

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