Mr. Gerry Howard:

I will comment on the Apple case but I will leave that aside for the moment because it is a slightly different issue. Traditionally, we have not been particularly strong in the Revenue Commissioners on the transfer pricing. It was never particularly an issue because we had a low tax rate. However, over the past few years we have been increasing the resources we apply to this area. Certainly in the past three years, the Minister has given us additional resources, for which we are very grateful. The resources comprise highly skilled individuals. We have a special unit in our large cases division regarding transfer pricing. We also have expertise elsewhere in terms of transfer pricing. Therefore, we are ramping up the activity in these areas. What we are doing with these resources is ensuring the pricing is based on arm's length pricing mechanisms. That is our position on royalties. We are grateful for any additional resources that we can get to apply to this area. However, it is a highly skilled task and a difficult issue, as we see from examining these matters. We have been active in this space. At least in the past three years, we have got dedicated resources into the area.

With regard to the Apple ruling, I do not want to say much because there are ongoing court proceedings thereon. I reiterate the position of the Revenue Commissioners on the Apple case. There was no departure from our perspective in the Revenue Commissioners. I support this position. There was no departure from the applicable Irish law by the Revenue Commissioners in terms of Apple. There was no preference shown in applying that law and the full tax was paid that was due in accordance with the law. That is the position we have on Apple. The issue in question is a different issue. To speak in general terms, the issues concerning Apple relate to branches and how branches are taxed. The corporation tax law on that is quite clear. It is in original corporation tax legislation, the Corporation Tax Act 1976. If one looks back over an even longer period, as I did last week, one notes the first cases that set out the principles in regard to this matter were 1880 cases. There is a long-established principle as to how these matters are to be dealt with and what the normal practice is in terms of case law and statute law. That is our position on it. Obviously, it is now with the courts so it is up to them to make a decision.