Kenny denies Ireland cut ‘special tax rates’ with firms

Taoiseach Enda Kenny has dismissed allegations by leading US senators that Ireland is a tax haven that cuts special deals with corporate giants like Apple.

The insistence during Dáil exchanges came as Apple’s head of tax operations Phillip Bullock confirmed that two of the company’s Irish subsidiaries, Apple Operations Europe and Apple Sales International, paid tax at a rate of just 2% in Ireland — but said they were not tax resident in Ireland.

However, the company did not confirm the US senate investigators assertions that the company had negotiated a 2% tax deal with Ireland.

Giving evidence, Apple chief executive Tim Cook was asked if they had a 2% deal, and said: “We went to Ireland in 1980. They were very much recruiting technology companies at that time. The Irish government gave us tax incentive back when we were a $100m company.”

The revelation came as Mr Kenny told to the Dáil “we are not a tax haven”.

“Ireland does not do special tax rate deals with companies. We do not have any special extra low corporation tax rate for multi-national companies.

“Our corporate tax rate is statute based... the headline rate of 12.5% is very close to the effective rate of 11.9%.

“Our tax system is statutory transparent,” Mr Kenny said.

Democratic senator Carl Levin, chairman of the subcommittee probing claims the technology giant has avoided more $9bn (€7bn) in tax by using Ireland and other overseas tax shelters, said: “Apple has quietly negotiated with the Irish Government an income tax rate of less than 2%, well under the Irish statutory rate of 12%, as well as the tax rates of other European countries and the US.”

The US tax probe sparked anger in the Dáil as People Before Profit TD Richard Boyd Barrett warned the Taoiseach was engaged in a “big lie” about cutting deals with “corporate monsters”.

“We are at the centre of a rotten financial and tax culture which is facilitating these corporate monsters in avoiding their tax responsibilities. We are getting next to nothing for our efforts,” he said.

Mr Cook told the Senate hearing that Apple employed nearly 4,000 people in Ireland as he denied that the firm’s subsidiaries were aimed at reducing tax liability.