Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

Everything about the Apple situation, including the changes made in the budget by the former Minister for Finance, Deputy Michael Noonan, in 2014, stinks to high heaven. Frankly, it stretches credibility that this happened at a time when new political forces had come into this Dáil. In 2012 and 2013, Deputy Pearse Doherty and I raised at the then Joint Committee on Finance, Public Expenditure and Reform the massive loopholes we could see in the corporate tax regime. We suggested that the effective rate being paid by big corporations like Apple was a tiny fraction of 12.5%. The double Irish arrangement was at the centre of that. There are plenty of other examples of loopholes. We will talk about some of them in a moment. When the spotlight began to come on, the reaction of the Fine Gael-Labour Party Government and Fianna Fáil was to close ranks immediately in order to protect Apple. In July 2013, when this stuff was starting to be debated, Deputy Pearse Doherty and I proposed that representatives of Apple, Google and Facebook should be brought before the finance committee to face questions about the tax affairs of those companies. The cameras were literally shut off as a result of a manoeuvre from the Chairman of the committee. Fine Gael and Fianna Fáil, along with Deputy Donnelly and a couple of others, voted to switch off the cameras while we debated whether Apple and the other companies might be brought in. Not only did they not want those companies to come in, but they did not even want anyone to know we were discussing whether they should come in.

In 2013, the Government closed ranks to protect Apple and ensure it was not questioned about what it was up to. At this time, international and domestic pressure was building with regard to the double Irish arrangement. Right up to the last moment, the Government denied that this country was playing any role in that arrangement. It was finally forced to announce that it would be closed, although it is worth noting that it is still not closed. It is still operable up to 2020 for companies that have benefited from it. Apple, and probably others, had to try to find a new way of evading tax. In January 2014, the then Taoiseach, Deputy Enda Kenny, met the CEO of Apple. I would love to know what happened at that meeting. I do not know what happened. The closeness of this Government's relationship with Apple is remarkable. We know from the Paradise Papers, or, as I like to call them, the parasite papers, that in March 2014, lawyers acting on behalf of Apple began to search for new ways to avoid paying tax. According to one of the leaks, Baker McKenzie, which was acting on behalf of Apple, contacted Appleby about its various tax haven locations and asked it to "confirm that an Irish company can conduct management activities... without being subject to taxation in your jurisdiction". That is what Apple wanted to do. It wanted to avoid paying any tax at all and, as we have now discovered, that is what it did.

Shortly afterwards, the then Minister, Deputy Noonan, decided to change the allowances regime for intangible assets, such as Apple's intellectual property assets from which it derives its profits and around which much of its tax evasion activity centres. I refer to the manner in which it sells ideas or intellectual property assets from one arm of the company to another, thereby turning profits into costs and consequently writing down its tax liabilities. Oddly and strangely, we made this change at this time. It is quite extraordinary. Frankly, I do not even understand why it should get an 80% allowance, never mind a 100% allowance. Why should it get an 80% allowance on these intangible assets? I would like somebody to explain that to me. When one arm of a company supposedly sells something to another arm of the company, which is a joke in and of itself, the company in question is allowed to claim massive allowances and gain enormous tax benefits that are worth hundreds of millions of euro to the company. We used to give this company an 80% tax break, but in the year in question, that was increased to 100%. Why did that happen? Is it a coincidence that it happened in the same year that Apple had to start thinking about restructuring its tax avoidance strategies? It moved one of its subsidiaries, which was previously based here, to the Channel Islands. I presume that company now sells the asset to the Irish-registered company without having to pay any tax on the profit it gets. It has discovered via Appleby that it pays no tax whatsoever there. The 100% allowance that the Irish subsidiary gets allows it to write down all of its profits which derive from that intellectual property for the next decade or so. It is quite extraordinary. Can the Minister explain how it happened? Why was that decision made in 2014?