Robert Dowds (Dublin Mid West, Labour)
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I was staggered to hear a report on a meeting of a committee of the US Senate about the tax affairs of two companies which are registered in this country. The first company, Apple Operations International, is 32 years old, had an income of $30 billion dollars between 2009 and 2012 and has never had a single employee. Its assets are managed by a company based in Nevada, its bank accounts are located in New York and its accounts and book-keeping are done in Texas. Not one of this company's bank accounts or management personnel is located in Ireland. It holds its board meetings in California. Apparently, the sole Irish director of the company attends these meetings by telephone. Most incredibly, it has not been registered for tax purposes in this country or any other country for at least the last five years. The second company, Apple Sales International, makes an Irish tax return. I would like to know if what was said regarding this company at the US Senate committee is correct. It was suggested that the company paid corporation tax of just $10 million on profits of over $22 billion - an effective tax rate of 0.05% - in 2011. According to the Senate report, this arrangement has allowed it to "shift $74 billion" from the US to Ireland "where Apple has negotiated a tax rate of less than 2%".

It is no secret that we have a low rate of corporation tax in this country. We support this rate because it helps to attract multinational investment. Like everyone else, I welcome this investment. Most of the business world is talking about our corporate tax regime. Ireland has been described as a tax haven in the US Senate even though in many ways it is not. We are asking people to take cuts and tax increases because this country is up to its neck in debt. As we all know, this is difficult for many families. Irish businesses are struggling to stay afloat. Irish people and business owners need to get a cast-iron reassurance that neither Apple nor any other company has been the beneficiary of a special corporate tax rate. The people need to know that every company in Ireland is paying its fair share and that Ireland is not a tax haven. A global debate on this whole issue is ongoing. When the G8 meets in Northern Ireland next month, it is important for the various leaders to consider how best to deal with this matter. It is also important for us to remind Irish and international companies that they benefit from the input of the State in terms of the services provided to them and the education received by their workers etc. I look forward to the Minister's response. I hope he will outline how the Government intends to deal with this issue.

Ann Phelan (Carlow-Kilkenny, Labour)
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I am also happy to have an opportunity to speak on this pertinent issue. There has been a great deal of commentary in the media in recent days after the CEO of Apple, Tim Cook, was grilled at the US Senate investigations committee. As my colleague, Deputy Dowds, has outlined in great detail, it appears that Apple negotiated a special rate of corporation tax - less than 2% over the last decade - with the Irish Government. It may be the case that possible tax revenues are escaping, but I have to say I am much more concerned about the reputational damage that has been done to Ireland across the world in recent days. I am a great believer in the process whereby perception becomes reality. In the international arena, on which we are reliant because we have to trade on our good name, Ireland is being perceived as a country that facilitates tax avoidance and is fast becoming stigmatised as a "tax haven".

I do not accept being attributed with such a title. Ireland has a long-standing record in its careful treatment of foreign investment firms. We have a solid, honourable reputation in the United States and Europe for inward investment. One wonders whether this is an attempt by the richest country in the world to recover tax from multinational corporations with US connections. However, to succeed in discrediting Apple worldwide would have huge implications, including very serious implications for Ireland and the economy we are trying to repair. There is no doubt we need to attain a much more structured and transparent way of tackling how tax residency is determined and managed in this country. From what I have viewed in recent days, Apple is not tax resident in Ireland or in the US, it is merely registered in this country.

I commend the Taoiseach and the EU leaders for pledging their commitment to intensify co-ordination of tax disclosure in an attempt to tackle issues such as this. It is a combined effort by all EU member states, not just by Ireland on the periphery. In doing so, it is imperative that we strengthen our management of tax residency. I look forward to the Minister's reply.

Michael Noonan (Limerick City, Fine Gael)
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The corporation tax paid by some large multinational corporations and the rate at which they pay that tax is an issue that has attracted a lot of public and media attention recently. Every country in the world has its own particular tax system. These systems have been put in place and developed over the years to reflect their own circumstances. Some multinational corporations, with the assistance of legal practitioners and tax advisors, have exploited the differences in these systems to their own advantage. What is evident is that these corporations can organise their company structures to such an extent that they are able to minimise their corporate tax liabilities while still acting within the law.

In recent days, national and international attention has turned to Ireland, our competitive corporate tax rate and the tax arrangements employed by some multinational corporations based here. I want to reiterate some points that are very important to the debate. First, I want to make it clear that we do not have a special low corporation tax rate for multinational companies. Ireland's tax system is statute-based, so there is no possibility of individual special tax rates for companies. All companies resident in Ireland are chargeable to corporation tax at the 12.5% rate on the profits that are generated from their trading activities in Ireland. A higher 25% rate applies in respect of investment, rental and other non-trading profits. Chargeable capital gains are taxable at the capital gains tax rate of 33%.

I want to make it clear that the tax rates being quoted publicly this week are, emphatically, not the rate of tax paid by such companies, or by any company on its Irish activities. Having examined the document produced by the US Senate sub-committee, it appears the rate that is being quoted is calculated as follows: the tax charged in Ireland on the branch activities in Ireland of companies that are not resident here, on the one hand, is divided by the entire profit of the companies concerned, as if they were resident here, which they are not. It is clearly wrong and misleading to attribute this rate of tax to Ireland. Companies which are not tax-resident in Ireland are no more chargeable in Ireland in respect of their entire profits than they are in the US, and these company profit figures should not be used to assert special tax rates that simply do not apply here.

Second, the ability of multinational entities to lower their aggregate global tax payments using international structures reflects the global context in which Ireland and, indeed, all countries operate. This is an issue that we cannot solve on our own, and in a time when citizens are being asked to dig deeper into their pockets, Governments around the world are now taking co-ordinated action to ensure these corporations pay their fair share of taxes. I would like to reassure the House that Ireland has been proactive and has already taken the lead on many of these global issues. For example, the Irish EU Presidency is making significant progress on a number of key files in the area of tax evasion and tax fraud, and we hope to bring them to a conclusion in the coming months. Along with EU Commissioner for Taxation and Customs Union, Mr. Algirdas Semeta, I sent a joint-letter to the Finance Ministers of the other 26 EU member states in April outlining seven key areas where concrete action can be delivered in the short term. Significant progress on the seven priorities set out in the joint-letter was made at the May ECOFIN and further progress is hoped for at the June ECOFIN. In addition, Ireland is participating in the OECD's "Base Erosion and Profit Shifting" project, and the action plan on the topic is due to be published in July.

Both the OECD and the EU work has clearly demonstrated that this is a global problem which cannot be solved by one nation or even one continent acting on its own. It is, therefore, unfortunate that Ireland has been singled out in this way.

Robert Dowds (Dublin Mid West, Labour)
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I am somewhat reassured by the Minister's response. I appreciate very much the work that is being done. I accept this cannot be done on an Irish basis alone and it has to be done across boundaries, and I appreciate that the Government is working to achieve this. I ask that the Taoiseach, as President of the European Council, ensure this issue is prioritised at the G8 meeting in Fermanagh.

I would be grateful if the Minister could comment on the effective tax that has been paid by multinationals. Is he in a position to comment on the international operations of Apple, the company that caused most upset in terms of tax avoidance?

Ann Phelan (Carlow-Kilkenny, Labour)
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I thank the Minister for setting out the factual situation on how we deal with the multinational companies and their tax situation. I reiterate that what people perceive is what becomes the norm. While I thank the Minister for all the work that is being done on the tax issue, we need to get out there and continuously repeat that Ireland is not, as we have been dubbed in the media, a tax haven. We have a job to do to clear up the unfortunate situation in which we were singled out. We need to keep repeating the mantra that we are not the tax haven we are perceived to be. I thank the Minister for his clarity.

Michael Noonan (Limerick City, Fine Gael)
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I believe the House appreciates that the taxation affairs of individuals and of individual companies are a matter that is confidential between the individual or individual companies and the Revenue Commissioners. The rate of tax that is chargeable in Ireland on the profits that are made by a company in Ireland is 12.5%. It is only when the global profits of a company are added together, and it is only paying tax in Ireland, and one then divides the Irish piece into the whole lot, that one comes up with a lower figure. We are fully tax compliant.

Tax management, as the House knows, is an international business. Very clever accountants and very clever lawyers are involved in it, and they basically try to get into an unspecified space between the tax laws of two jurisdictions. Operating in that space, they find ways of avoiding the tax that otherwise would have been payable. That is why there needs to be an international initiative, in so far as it is possible, to close down those tax opportunities that are there for those who manage taxes. I understand this will be discussed at the G8.

In reply to Deputy Phelan's question, the Taoiseach, Tánaiste and I have all made public statements clarifying the position in recent days. Our diplomats internationally have been briefed and will seek out the best opportunities at the best time to make the Irish case through their contacts.