Oireachtas Joint and Select Committees
Wednesday, 6 November 2019
Select Committee on Finance, Public Expenditure and Reform, and Taoiseach
Finance Bill 2019: Committee Stage (Resumed)
I have given the Minister the suggestion, and we have argued this up and down over recent years as to what is happening. I welcome his walk through how the figure of €722 million is arrived at in respect of intangible assets. There are questions as to whether these companies had a tax liability in the year and whether they used the full amount, which could reduce the figure and so on. That is fine and that is all factual.
The vast majority of those intangible assets are located in one company, namely Apple. In 2015, when Apple restructured its operations, it moved its $200 billion of intangible assets to Ireland. In that year, a year in which the increase in our GDP was classed as leprechaun economics, there was a huge boost in the national accounts in respect of intangible assets. Apple's restructuring accounted for the vast majority of this. The restructuring happened because of other issues, as has been documented in some of the papers that have been leaked. Apple does have a tax liability. Apple is able to use this provision within our code to reduce that tax liability significantly. If any company transfers the entirety of its intangible assets to the State, we should see as a result a significant increase in tax revenues, especially when we are talking about $200 billion of intangible assets. There is, therefore, one company in particular benefiting from this. That same company had contact regarding this measure before the Finance Bill that gave effect to it came into being. I do not know what that contact was. I know that the matter was discussed. It may have been just a mention. I am concerned, however, that this is not being done for the general health of the nation but because it concerns a particular company that would have a tax liability if there were an even playing field for all companies that have onshored intangible assets, which means that only 80% of them can be used against one's tax liability in any given future year. This does not apply to Apple because it onshored prior to the date on which this measure came into effect, and therein lies the problem. The vast majority of the €722 million will come from one company. It has been able to restructure because of a provision in our tax code which did not have a significant effect on its tax liability to the State, whereas if the provision were to come into effect today, it would have an effect on any other company's tax liability. Will Apple be here in ten years? I genuinely hope so. Will its structure be the same in ten years, though? Nothing changed for the people working in Cork in respect of taxation structure. The company is still operating, employing people, manufacturing, producing sales and so on but its tax structure has changed completely. Given the volatility and changes happening internationally, there is nothing to say that this will remain constant for the coming years and that we will, therefore, get this money.
I do not understand why the Minister is resistant to this. I genuinely believe he should accept this amendment and ask Seamus Coffey to do a further report on this issue. The Minister has raised during debate on Committee Stage of other Finance Bills issues such as reputational damage. I note he has not referred to that today, but all these areas should be considered and there should be an evidence-based expert view on this. Whether it would be a good or a bad move is the substance of some of the arguments I have put forward about the fear that companies' structures may change, in which case the issue of timing would become more significant than at present - or perhaps that is not the case. However, given the quantum of resources we are talking about, there is a need to take this issue seriously. I am not suggesting the Minister is not taking it seriously but I ask for an expert report on this to be commissioned and laid before the House in order that all Deputies are further informed on this tax move.