Taxation Commissioner Algirdas Semeta said that he too had received assurances from Ireland that they had no bilateral agreement with Apple, but “we have to work and strengthen our efforts against aggressive tax planning”.
He said sometimes large multinationals take advantage of tax conventions to channel more of their profits to third countries. “This has to be addressed,” he added. Apple has five companies registered in Ireland, three of them with no tax residence and one of which had a net income of €23bn in three years to 2012 but paid no corporate tax.
Professor Jim Stewart of the TCD Business School said that the key point is the tax rate is set in law and cannot be changed. “It is the tax base that is up for negotiation and such negotiations are very one-sided given the resources Apple has compared with the Revenue and Ireland and elsewhere”.
Ireland’s corporate tax rate is 12.5% and the average rate paid is around 11.7% when exemptions for research and other areas are taken into account. The Government points out that the rate actually paid is higher than countries such as France with a higher stated rate but a single figure actual rate.
Mr Cook, responding to questions at a conference, said: “We don’t use tax gimmicks,” and added that Apple pays $6bn (€4.6bn) in US taxes which was “more than anyone else”.
“We have no special deal with the Irish Government,” he said, adding the US internal revenue had no problem with a system allowing profits for money overseas to be taxed in other jurisdictions.
The problem was created by successive US governments. “It’s a band-aid and paper-clip kind of thing,” he said. He was happy Apple would be part of the reform process but he was concerned decisions might not be thought through logically.
Ibec welcomed the statement by Mr Cook, saying that Ireland’s corporation tax regime was applied in a consistent and transparent manner.
IBEC chief economist Fergal O’Brien said: “Ireland’s corporation tax system remains a key part of our economic policy.”
The EU is in the middle of looking at a whole series of tax changes to prevent tax being lost to countries through fraud and by what they call “aggressive tax planning” — which some believe could apply to Ireland.