Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The statement is an inaccurate characterisation of the facts of this case and the application of Irish tax law. These companies are not Irish tax resident. Our tax legislation, which reflects international norms, only allows us to tax non-resident companies on the profits they make in Ireland. The central aspect of this case is that the economic activity that created the value in Apple's business operation was not conducted in Ireland. Everybody knows that the iPhone and other well-known Apple products were developed in the US, not in Ireland. The bulk of the profits, therefore, were not Ireland's to tax.

The central point of Ireland's response is that the 12.5% tax rate was applied to the Irish branch and that was all that could be subject to Irish tax under the legislation. That is what Revenue did. Ireland is not seeking to defend the outcome achieved by the company but I can be clear that Ireland received all the tax that was due under Irish law. Importantly, the amount of tax correctly reflects the economic reality of the activity taking place in Cork. The underpinning issue from Ireland's point of view is that the OECD has laid down the rule of what should be taxed. The profits that accrue from economic activity in a particular location are liable to tax in that location. The members probably have Apple phones themselves and if their eyesight is good enough they can read the little italic mark in the back which states that it is designed in California and manufactured in China. This shows where the economic activity is. Non-resident companies under Irish law are not liable to tax on profits accrued elsewhere.

The Commissioner is not giving a tax opinion but a state aid opinion. That will be the subject of the case. Apple paid its tax on all its profits in Ireland and last year it was one of the biggest corporate taxpayers in the country.