Apple tax: Tech firm got €18m in grants for Cork plant as well as logistical support

When Richard Bruton, then jobs minister, answered a question in the Dáil three years ago about the value of state supports for Apple, he was quick to point out that the total sum over 33 years was less than one year’s income tax receipts from the company’s employees.

He said Apple had received €17.8m in grant assistance from IDA Ireland in relation to its Cork facility since 1980 while, on rough calculation, a year’s PAYE and USC collected from its workforce would total at least €25.6m.

It is notable that he did not frame his answer — to questions by Sinn Féin’s Peadar Toibin — in the context of the corporation tax paid by the company.

But while €17.8m sounds modest given Apple’s lengthy relationship with Ireland, it is only one aspect of the support the company has received.

When it first came here in 1980, a 10-year tax holiday for multinationals was in effect which meant it paid no corporation tax until 1990.

Companies that arrived a year later were not so lucky as the scheme had been wrapped up under a prior agreement with Brussels as part of the conditions of Ireland’s entry to the EU.

But Apple had fair warning that their vacation was coming to an end and restructured itself to create Apple Sales International in 1990. This was the main mechanism by which the company has managed to avoid Irish taxes since.

Employees working on the iMac production line at the Apple European Headquarters in Hollyhill, Cork. Picture: David Keane

In 1991, the first of two tax rulings by Revenue setting out the company’s tax status came into effect. It was replaced by a similar one in 2007. Both had the effect of extracting tax at a rate that varied from a very modest 4% to a barely visible 0.005%.

It is also highly likely the company benefitted greatly from the legal, commercial, and logistical expertise of the IDA in setting up in Ireland, navigating the industrial relations landscape, and getting to grips with the export regulations.

It’s hard to put a value on having your hand held while taking tentative first steps in a new country but it’s safe to suggest it is a key support.

As Richard Bruton said in his Dáil reply in 2013: “Over this period [three decades], the Agency [the IDA] has met with Apple frequently in relation to the execution of its mandate.”

Those meetings have continued since with the IDA swift to welcome Apple’s announcement last year of a new €850m data centre in Athenry, Co Galway, noting the agency had worked hard to secure a site for the project and so secure the company’s investment.

It said at the time, however, that there was no grant assistance provided for the project.