Irish government says not to blame for low Apple tax rate

By Conor Humphries

DUBLIN (Reuters) – Ireland said on Tuesday it was not to blame for Apple Inc’s low global tax payments after the U.S. Senate said the company paid little or nothing on billions of dollars in profits stashed in Irish subsidiaries.

In a 40-page memorandum released ahead of an appearance by Apple CEO Tim Cook before Congress on Tuesday, a Senate subcommittee identified three subsidiaries that have no “tax residency” either in Ireland, where they are incorporated, or in the United States, where those companies are managed.

The main subsidiary, a holding company that includes Apple’s retail stores throughout Europe, has not paid any corporate income tax in the last five years, the report said.

“They are not issues that arise from the Irish taxation system,” deputy prime minister Eamon Gilmore told national broadcaster RTE on Tuesday when asked about the report.

“They are issues that arise from the taxation systems in other jurisdictions and that is an issue that has to be addressed first of all in those jurisdictions.”

Ireland, he said, was pursuing the issue “very strongly” at the European Union and the Organization for Economic Co-operation and Development (OECD), which is spearheading anti-tax evasion initiatives, Gilmore said.

The issue will be discussed at a meeting of European Union officials on Tuesday, he said.

The subsidiary identified by the Senate, which has a mailing address in the Irish city of Cork, received $29.9 billion in dividends from lower-tiered offshore Apple affiliates from 2009 to 2012, comprising 30 percent of Apple’s total worldwide net profits, its report said.

The report said it exploited a difference between Irish and U.S. tax residency rules.

Apple said in a comment posted online on Monday it does not use “tax gimmicks.” It said the existence of its subsidiary “Apple Operations International” in Ireland does not reduce Apple’s U.S. tax liability and the company will pay more than $7 billion in U.S. taxes in fiscal 2013.

A number of U.S. multinationals, including Google and Facebook, have their European headquarters in Ireland to take advantage of its low corporate tax rate.

The government regularly touts its success in attracting international investment as one of its main achievements.

(editing by Anna Willard) Read story


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