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Ireland: We are 'not to blame' for Apple tax affairs
Ireland refused to take the blame Apple's low global tax payments after a US Senate report said the company paid little or nothing on billions of dollars of profits stashed in Irish subsidiaries.
A panel of senior politicians are set to quiz chief executive Tim Cook and two other senior executives at Apple on the findings of an investigation by the US Senate on Tuesday. Photo: AP
By Denise Roland
1:17PM BST 21 May 2013
The US Senate Committee unleashed heavy criticism on the California-based company on Monday, branding its complex structure the "Holy Grail of tax avoidance". According to a Committee report, the structure includes three Irish-based subsidiaries that appear not to be a tax resident anywhere in the world.
"They are not issues that arise from the Irish taxation system," deputy prime minister Eamon Gilmore told national broadcaster RTE on Tuesday when asked about the report.
"They are issues that arise from the taxation systems in other jurisdictions and that is an issue that has to be addressed first of all in those jurisdictions."
A panel of senior politicians are set to quiz chief executive Tim Cook and two other senior executives at Apple on the findings of an investigation by the US Senate on Tuesday. The report focuses on three subsidiaries based in Ireland, which, it claims, have allowed Apple to avoid billions of dollars in US income tax.
The Senate report alleges that Apple pays no tax on the $30bn income generated between 2009 and 2012 at one Ireland-based subsidiary, Apple Operations International (AOI). It says that by incorporating AOI in Ireland but managing it from the US, Apple has taken advantage of a tax loophole whereby Ireland only asserts tax jurisdiction on companies managed there and the US bases tax residency on where a company is incorporated. As such, Apple is not tax resident in either country.
It goes on to accuse Apple of paying an effective tax rate of just 0.05pc on the $74bn income attached to another Irish subsidiary, Apple Sales International (ASI), and of declaring no tax residency for a third, Apple Operations Europe (AOE).
"Apple claims to be the largest US corporate taxpayer, but by sheer size and scale, it is also among America's largest tax avoiders,” said Senator John McCain, who co-authored the report with Senator Carl Levin.
Apple funnels profits from its overseas sales into ASI and AOE through a deal struck thirty years ago, in which the Irish subsidiaries share the costs of research and development activities in the US in exchange for certain intellectual property licences on the resulting products. The licenses grant the Irish subsidiaries the right to the profits generated from sales of Apple products outside the US.
Apple has said in filings with the US Securities and Exchange Commission that it has $40.4bn in earnings outside the US on which it hasn’t paid US taxes. If Apple brought that money back to the US, the company would owe $13.8bn, according to the filings.
Ireland refused to take the blame Apple's low global tax payments after a US Senate report said the company paid little or nothing on billions of dollars of profits stashed in Irish subsidiaries.
A panel of senior politicians are set to quiz chief executive Tim Cook and two other senior executives at Apple on the findings of an investigation by the US Senate on Tuesday. Photo: AP
By Denise Roland
1:17PM BST 21 May 2013
The US Senate Committee unleashed heavy criticism on the California-based company on Monday, branding its complex structure the "Holy Grail of tax avoidance". According to a Committee report, the structure includes three Irish-based subsidiaries that appear not to be a tax resident anywhere in the world.
"They are not issues that arise from the Irish taxation system," deputy prime minister Eamon Gilmore told national broadcaster RTE on Tuesday when asked about the report.
"They are issues that arise from the taxation systems in other jurisdictions and that is an issue that has to be addressed first of all in those jurisdictions."
A panel of senior politicians are set to quiz chief executive Tim Cook and two other senior executives at Apple on the findings of an investigation by the US Senate on Tuesday. The report focuses on three subsidiaries based in Ireland, which, it claims, have allowed Apple to avoid billions of dollars in US income tax.
The Senate report alleges that Apple pays no tax on the $30bn income generated between 2009 and 2012 at one Ireland-based subsidiary, Apple Operations International (AOI). It says that by incorporating AOI in Ireland but managing it from the US, Apple has taken advantage of a tax loophole whereby Ireland only asserts tax jurisdiction on companies managed there and the US bases tax residency on where a company is incorporated. As such, Apple is not tax resident in either country.
It goes on to accuse Apple of paying an effective tax rate of just 0.05pc on the $74bn income attached to another Irish subsidiary, Apple Sales International (ASI), and of declaring no tax residency for a third, Apple Operations Europe (AOE).
"Apple claims to be the largest US corporate taxpayer, but by sheer size and scale, it is also among America's largest tax avoiders,” said Senator John McCain, who co-authored the report with Senator Carl Levin.
Apple funnels profits from its overseas sales into ASI and AOE through a deal struck thirty years ago, in which the Irish subsidiaries share the costs of research and development activities in the US in exchange for certain intellectual property licences on the resulting products. The licenses grant the Irish subsidiaries the right to the profits generated from sales of Apple products outside the US.
Apple has said in filings with the US Securities and Exchange Commission that it has $40.4bn in earnings outside the US on which it hasn’t paid US taxes. If Apple brought that money back to the US, the company would owe $13.8bn, according to the filings.
