In the wake of the Paradise Papers revelations about global tax avoidance, Social Democrats co-leader Róisín Shortall TD criticised the government’s role in facilitating massive tax breaks for Apple.

Speaking during Leaders’ Questions in the Dáil today, Deputy Shortall said:

“The theme running though the Paradise Papers is the relentless quest of the wealthy and powerful, the great and the good, to find ways of avoiding tax. We saw this most starkly in the operation of the ‘Double Irish’ and its use by Apple and the subsequent ruling by the European Commissioner that this favourable treatment constituted State-Aid.

“In that regard it certainly seems that the facilitation of tax avoidance was an intentional strategy adopted by Government and its agencies in 1991 and updated in 2007. It was very hard to understand why the Government in September 2016, with the full benefit of hindsight, could stand over the manner in which the sweetheart deals were done and vouch for their full compliance with the law.”

Deputy Shortall said the public generally could not understand why the Government should spend considerable millions in appealing the Apple ruling.

She added:

“The position of the then Minister for Finance, Michael Noonan, was very hard to understand. In 2013, he signalled that he intended to close down the Double Irish on which this tax avoidance arrangement was based.

“The impact of this was considerable for Apple’s tax liability. We know that there was much engagement between Apple and the Department of Finance around this time. We also know, thanks to the Paradise Papers,

  • that Apple went on a jurisdiction shopping spree in search of a tax-dodging deal;
  • following the closing of the Double Irish that Apple restructured its companies;
  • registered two of its Cork companies in Jersey; and,
  • took up tax residency in Ireland for its remaining Cork company, Apple Operations Europe.

“This, combined with the changes made to the capital allowances regime in 2014, allowed them to sell their Intellectual Property back to the Irish registered company and avail of the massive tax breaks which this measure facilitated.

“Was our Capital Allowance regime changed to allow Apple to keep its formerly “stateless” profits entirely untaxed? In other words, was it done to compensate Apple for the loss of the Double Irish? Had Apple or their representatives requested a change to the Capital Allowances regime? How much have Apple benefited by this change, and how much has the State lost?”

ENDS

7 November 2017

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