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

Pascal Saint-Amans, who is the tax director of the OECD and was in charge of the BEPS project, visits us regularly and he was here last Monday.

He was asked questions about the Apple decision at a press conference he held. He stated two things of importance: first, that in his view the arrears were due to the exchequer in the United States and second, that there was no threat from the Commission or anywhere else to Ireland's 12.5% rate and that under law and the European treaties we were absolutely entitled to maintain the 12.5% rate.

The issue of the arrears being due to the American exchequer arises from the fact that Apple paid a very low amount of tax internationally. That has been recited several times, but Apple had a significant tax liability, as distinct from the tax it paid. The tax liability turns into payable tax when profits are repatriated to the United States under US law. His view, and that of the OECD, that the arrears are really due to the United States is because that is where the economic activity took place. That is where the iPad and the iPhone were developed and that is the source of Apple's profitability and if the profits are repatriated to the United States the company's liability for US tax will trigger in to the actual payment of tax at 35%.

See this speech in context