Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The reality is that this is a classic BEPS scenario arising from the mismatch between tax laws in two different jurisdictions. Although the profits concerned were generated in the United States, that country did not tax them as the companies were not incorporated there. In line with the tax treatment of non-resident branches internationally, the Irish law focuses exclusively on the profits arising from the activities of the branch in Ireland, and this regards any profits arising elsewhere. This is how Irish tax law operates and has operated always. Nobody challenged it.

Ireland is not seeking to defend the outcome achieved by the company but it received all the tax due under Irish law. Importantly, the amount of tax correctly reflects the economic reality of the activity taking place in Cork. I am not making a case to defend Apple's corporate structures in respect of non-resident companies in Cork. That is not my business. I am saying that because of the way in which they were non-resident, there was not a tax liability in Ireland for the profits put through them. That is the argument.

The Commission, in my view, is misusing state aid powers to lay the blame for a mismatch in international tax rules at Ireland's door. Its approach conflicts with the core international tax principle of ensuring taxing rights are aligned with economic activity. That is another strong plank in the case we will be pursuing. The profits charged to Irish tax fully reflect the operations carried out in Ireland. That is a fact. The tax on profits generated in Ireland was fully paid. The driving force behind the profitability of the two companies is Apple's highly valuable intellectual property, which is wholly created and developed in the United and thus is not taxable on the basis of the activities in Ireland.