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Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

Catherine Connolly: I understand that. I want to raise two more issues, residency in 183 days and Apple. I will bite into that apple. I do not expect Mr. Cody to comment because of the court case but I want to run something by him about the acknowledgement. The two companies in question that operated in Ireland, Apple Sales International, ASI, and Apple Operations Europe, AOE, were taxed for the purposes of...

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

Marc MacSharry: We are in that ballpark. There were two tax rulings on Apple in 1991 and 2007 which related to how the profits of Apple Sales International and Apple Operations Europe were assessed in Ireland. Is that correct?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

David Cullinane: I am just trying to understand the calculations. If all state aid which was given to those two Apple companies is being calculated, I would imagine that similar state aid was given to other companies, was it not? I am trying to establish what exactly the Department is looking at to arrive at whatever figure it will arrive at. I am sure it will be greater than €13 billion. Is it...

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

David Cullinane: Perhaps I can put if differently to help the witnesses understand me. I put this question to Mr. Cody. The judgment is that the State did not collect enough tax from Apple. That judgment was because of what the Commission saw as favourable state aid rules being applied to Apple, a special arrangement or whatever way one chooses to phrase it. That was the substance of its judgment, which...

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

Catherine Connolly: I read this document last night, but then I considered Apple. According to page 37, the head office was not tax resident in any country. I do not want to get into the specifics, as I understand the matter is before the courts, but I will ask in a general way as a result of what Dr. Keegan stated. There was a head company, with two companies operating in Ireland - Apple Sales International...

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

Catherine Connolly: At the risk of raising a rotten apple, I will discuss the Apple case in a general way. It was mentioned in the up-to-date briefing document. The witnesses referred to residency. Is incorporation of the company important?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

Marc MacSharry: The majority of profits were allocated to a head office within Apple Sales International, with the remainder allocated to the Irish branch of Apple Sales International. Is that correct?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

Catherine Connolly: So prior to that, in addition to Apple, any company could have been or was doing this for all we know. Companies could have done exactly what Apple did, namely, not have been resident in any country for the purposes of tax but could have had two branches in Ireland that were only caught for limited amounts here while the vast profits went to a company that was not tax resident anywhere. Our...

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

Marc MacSharry: I wish to make a couple of points on Apple to understand how we approach things, if that is possible. Again, if I am straying into territory that is not permitted, stop me, Chairman. Have we the €13 billion in an escrow account yet?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

Mr. Niall Cody: The issue around Apple and the changes that were made in respect of stateless companies in the Finance Act 2014 have been well thrashed out.

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

David Cullinane: That would involve any payment which could be perceived as state aid to either of the Apple companies involved. What types of payments would they be in broad terms?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

David Cullinane: It is not that tricky because the judgment was very clear. The judgment was that favourable treatment was given to Apple. Was that not the essence of the Commission's judgment?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

David Cullinane: Forgive me if I am wrong, but was the judgment not that there was a special arrangement for Apple in terms of state aid rules which did not apply to other companies? Was that not the substance of the Directorate General's judgment? Perhaps the Department might have an answer to that question.

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

Catherine Connolly: ...I only wanted to get it clear in my own head. It was accepted that the company was stateless. The company that took in most of the profit would pay tax nowhere. Is that right? Take it away from Apple, call it Orange, or anything Mr. Cody likes. In other words, other companies could have been doing exactly the same.

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

David Cullinane: Okay. I thank Mr. Cody for that. I have a very quick question on Apple, which I know Mr. Cody has dealt with. He has said that Revenue is 99% of the way there in terms of calculating the liability. I imagine that, even though it is only two companies, Revenue will be going back over time. What is the time period it is looking back into?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

Marc MacSharry: ...State position is that the €13 billion does not accrue to us. The European Commission has indicated the amount of tax Ireland has to collect could be reduced if other countries, where sales of Apple products took place, lay claim to some of that taxation. At this point have any other countries indicated directly or indirectly through media reportage that a proportion of this...

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed) (22 Feb 2018)

Marc MacSharry: ...and State agencies in terms of how they could to respond to and respect this committee in the work it is trying to do. I have some queries following from the last day. It is okay to talk about Apple?