Media release: Investigation needed of great Apple giveaway costing Ireland billions

Media release

For immediate release

Investigation needed of great Apple giveaway costing Ireland billions

27 October 2015 – Ireland’s secret tax rulings system is costing the taxpayer billions of euros and needs to be opened up to scrutiny by the Public Accounts Committee, according to the findings of a tax justice report from Debt and Development Coalition Ireland released today.

As Apple publishes its fourth-quarter results on the same day, the corporation sitting on the biggest cash reserves in history continues to gain, year after year, from a secretly negotiated tax arrangement with the Irish state. This means it pays an effective tax corporate rate of less than 2%, which adds up to multi-billion euro tax deduction from the Irish taxpayer.

“Debt and Development Coalition Ireland is calling for the Government to hold a full Dail debate on the findings of a European Commission ‘state aid’ investigation into Ireland’s tax arrangements with Apple, expected in the coming weeks – before a Government decision to appeal any adverse ruling to the European courts,” says DDCI policy officer Eamonn Casey.

“Also, with such a vital issue of Government taxation and spending policy in question, and the huge sums of tax revenues involved, we are calling for the Public Accounts Committee to carry out a full review of the use of Irish tax rulings by Apple and other multinational corporations,” he said.

The billions in tax revenue lost through secret tax rulings such as this (we can only presume that corporations other than Apple have negotiated deals in Ireland) would contribute greatly to the public purse, providing for spending on hospitals, schools, mental health services and so forth that Irish society badly requires. 

Low-income countries also lose out enormously when multinational corporations minimise their taxes through profit-shifting practices and aggressive tax avoidance, operated through countries like Ireland. Altogether, multinationals’ corporate tax avoidance costs poor countries around $100 billion per year, according to UN figures.

“A review by the Public Accounts Committee is needed to identify any abuses there may be of the secret tax rulings system, and the reforms required,” said DDCI policy officer Eamonn Casey. “It would clarify the winners and losers from a tax rulings regime that has a huge impact on the public accounts, but no Oireachtas oversight.”

Contact: DDCI Policy Officer Eamonn Casey, 087 9506222

Notes to editors

• DDCI’s report, Corporate Tax Secrecy and the State: the Apple case in Ireland, will be available online from Tuesday 27 October.
• Preliminary findings from a European Commission investigation into Ireland’s tax arrangements with Apple support the view of very significant losses to Irish tax revenue, each year and ongoing, arising from Revenue’s tax rulings to company subsidiaries – which appear to the European Commission to be shaped more by political negotiations than by any rational economic argument.

• The European Commission’s ruling as to whether Ireland’s tax arrangements with Apple subsidiaries constitute ‘state aid’ of a type that contravenes EU competition rules is expected within weeks. The Irish government holds the bizarre position that if the European Commission investigation finds that it is entitled to billions more in tax revenues from Apple, then Ireland will contest that decision vigorously in the European courts.

• DDCI and colleagues in Tax Justice Ireland support the European Commission view that “when citizens are making huge efforts and many small businesses are struggling to remain afloat, the ability of certain − mostly multinational − companies to minimise their taxes through aggressive tax planning is intolerable. Corporate tax avoidance not only eats into Member States' much-needed revenues, but it also damages public morale and creates competitive disadvantages for companies that cannot, or will not, engage in abusive tax practices.”  http://europa.eu/rapid/press-release_MEMO-15-4609_en.htm 

• Recent RedC research for Christian Aid Ireland has found that only 36% of Irish people trust the information multinationals provide about their tax payments in Ireland. 76% believe that greater transparency around the activities of multinationals would be useful in determining whether they are paying the correct amount of tax. These and other key findings of that poll are available at: http://www.christianaid.ie/pressoffice/pressreleases/september_2015/Vast-majority-believe-tax-avoidance-by-multinationals-to-be-morally-wrong.aspx

• Debt and Development Coalition Ireland is the Irish partner in a European Union-funded project that produces an annual ‘Stop Tax Dodging’ report. The 2015 report will be launched on 4 November to mark the first anniversary of the LuxLeaks dossier released by the International Consortium of Investigative Journalists (www.icij.org), which detailed widespread and systematic tax avoidance by multinational corporations, including many headquartered or operating in Ireland.

The 2015 Stop Tax Dodging Report, which tracks the role played by the European Union and its Member States in supporting an unjust global tax system, will be available at www.debtireland.org on 4 November. The report finds that although some loopholes (such as the ‘Double Irish) are being closed, a complex and dysfunctional EU system of corporate tax rulings, treaties, letterbox companies and special corporate tax regimes still remains in place, facilitating aggressive tax avoidance by multinational corporations.

Information leaked by whistleblowers has become the key source of public information about tax dodging by multinational corporations, when what is needed is public country by country reporting of multinationals’ profits and tax deals, along with greatly increased transparency about company ownership, tax rulings and corporate tax incentives.