Apple and Google: We’ve paid all tax we legally owe
They were appearing, along with McDonald’s and Ikea, before the European Parliament’s committee investigating special tax deals between multinationals and governments, allowing them to minimise the amount of tax they paid to the state, including Apple and Ireland.
They told of the thousands of jobs they have created, directly and indirectly, and are now contributing to, through SMEs and entrepreneurs using their apps and services and availing of franchises.
Apple is the world’s largest taxpayer, paying $13.2bn, an effective tax rate of 26.5%, on its profits worldwide last year. That is according to Cathy Kearney, vice-president of Apple Europe, based in Cork. The company does not operate the ‘double Irish’ tax loophole; it pays whatever tax is due in Ireland, she told MEPs.
Google’s Adam Cohen, head of economic policy for Europe, Middle East, and Africa, said it pays most of its tax in the US; some 19% of its revenue over the past five years.
Like Apple, he said Google has long advocated a simple, more coherent tax system. Mr Cohen said “clear rules of the road and wider co-ordination”, would be better.
“A patchwork of changes promote difficulty. It is up to governments to write rules and companies to follow. Google abides by the law. We make use of tax incentives and structures that are well known, that are accessible to and employed by virtually all companies,” he said.
Asked about the Bermuda tax-haven, Mr Cohen said Google has a tax structure in Bermuda that does not affect the amount of tax it pays in Europe. “Without Bermuda it would be the same.”
Loopholes such as the Double Irish, the Dutch Sandwich, and the Bermuda tax-haven are all products of US tax laws that allow firms to keep money offshore and pay US tax only when it is lodged in the US, Mr Cohen claimed.
The Double Irish is being phased out in 2020, he noted.
The company representatives repeated several times that what businesses need are clear, simple, and straightforward tax rules that give clarity and certainty, are easy to implement, without too much bureaucracy, and which ensure equal treatment.
Both said they would welcome new tax rules agreed by the OECD as they promise more certainty and simplicity for companies.
Dublin MEP Brian Hayes (Fine Gael) asked whether the companies would use a knowledge box that would give them a tax benefit for research and development in Ireland. Both said they don’t use knowledge or any intellectual boxes. Apple said the vast majority of its R&D is in the US.
They did say, however, that they are open to the proposed Common Consolidated Corporate Tax Base, if and when it is introduced.
