Seán Sherlock (Cork East, Labour) | Oireachtas source

I return to the Commissioner's comments when she appeared before the committee the other day. She said:

We were looking at whether the allocation of profits was recorded in the branch and whether, therefore, it had to be taxed in Ireland, or recorded in the stateless headquarters and, therefore, not to be taxed in Ireland. We found that the recordings by Apple, which we did not question, could not be supported by economic activity. That is why they ought to be recorded in the branch of the company that is taxable in Ireland.

She went on to state:

We do not investigate or value the intellectual property. We have not done that here. We have seen that Apple has organised itself with what it refers to as a cost-sharing agreement. This means that most of the research and development takes place at the Apple Inc. facility in Cupertino.

I am trying to get my head around this. In Mr. Cody's lines of argument, he states that the Commission's attribution of Apple's intellectual property licences to the Irish branches of AOE and ASI is not consistent with Irish law and, moreover, is inconsistent with the principles it claims to apply, as is its stated refusal to take into account the activities of Apple Inc. There is no reconciliation between those two statements. I am trying to distil the contradiction in layperson's terms. In respect of the intellectual property piece, the Minister asked us to refer to the phones and so on being made in China and the intellectual property in Cupertino. Can somebody distill that for me in bare simple terms? Where does the intellectual property piece fit into all this if the Commissioner is saying that the Commission did not investigate or value the intellectual property? Mr. Cody is saying that the intellectual property is not generated in Ireland. If I am interpreting the Commissioner correctly, she is saying that the Commission is not investigating the intellectual property so, therefore, it is not investigating an Irish operation in that sense. How do we reconcile that? How do we get a better understanding of that dynamic?