Don’t Upset The Apple Cart

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From top: Fine Gael MEP Brian Hayes, Apple logo and Richard Murphy, of the City University London

Further to the Apple tax ruling

Richard Murphy, a tax expert based at the City University London, along with Fine Gael’s Brian Hayes spoke to Seán O’Rourke this morning.

Mr Murphy, from the outset, explained that he wasn’t in the least bit surprised by the European Commission’s ruling, as Ireland had let Apple have “unfair advantage” over its competitors and, therefore, under EU competition law, the ruling is logical.

He said the decision isn’t one about tax so much as it is about competition, adding:

“It is the right decision, yes it is because if we believe in fair markets, if we believe that that’s the way we should organise the world, then everybody has to compete on a level playing field. And, as any economist will tell you, we need transparency. Well, this was a secret deal, it was done without people knowing. The consequences were unclear for a long time and it did give Apple an unfair advantage over everyone else. It was bad for economics, it was bad for Ireland, let’s be clear here. It’s very obviously bad for Ireland now and it was bad for everybody else in the marketplace – for you and me as consumers.”

From the rest of the discussion:

Brian Hayes: “Well, this is a very serious decision, Sean. And I have no doubt that this will cause significant reputational damage to the country and that’s why I presume the Government will immediately have to appeal this decision. I think some of the logic that is behind this decision, I haven’t got the full document which is now being produced but some of the logic, in my view, is quite faulty.”

“The essential argument is that we’re being asked to collect tax that was generated from profits in other countries, ostensibly in the United States of America. Now there is absolutely no doubt that the change of tax structures brought about by [Finance Minister] Michael Noonan in terms of the ‘stateless’ branches of the companies that were there have come to an end, as a consequence of his decision. There’e been a fundamental change to the law in the last number of years and I think the argument that’s being made in the United States, and by the Irish Government is, and we are being asked to retrospectively apply a new tax code on a whole range of…”

Talk over each other

Seán O’Rourke: “But is it a new tax code, Brian Hayes? I mean if you don’t pay your taxes, or I don’t pay mine, I mean we’ll be very quick to tell us we have to pay retrospectively and with interest.”

Hayes: “You pay tax on what you generate in Ireland, Sean. You don’t pay tax for what you generate in the United States of America or elsewhere. And that’s the fundamental problem here. This is, in my initial reading of this, fundamentally altering the international standard about where you apply. You pay tax in Ireland on the value that you, on the profits that you create in Ireland. We cannot be responsible for taking the tax from other countries. And that’s why all of these issues can only be resolved at an OCED level.”

O’Rourke: “Right. Well, let’s ask Richard Murphy about that. Do you take that argument, Richard Murphy?”

Murphy: “No, I don’t buy that argument at all. There are a number of reasons why not. Firstly, this arrangement was designed to make sure that the tax was not paid in any other country, as well. So you can’t pretend that the tax should have been due in the UK and therefore Ireland shouldn’t be penalised because the arrangement made sure that no tax was paid in the UK. So you can’t use that argument. If you had been sure it was paid in the UK, you could use that argument. But you have not, you know it was not. And, secondly, the deal was designed to make sure the tax was actually paid nowhere. If it had been paid in full and properly in Ireland, I think there would have been some defence but, in practice, the structure was designed to make sure that, in effect, tax was not paid at all. And therefore, the ruling it is, well it must be due somewhere. And that must be Ireland. And, because it has not been taxed anywhere else, because that was what the ruling intended, Ireland should be responsible for collecting the tax…”

Later

Hayes: “And Seán, the only other argument the Irish government have always said and it has been mentioned by every other member state of the European Union, this is ostensibly a matter for the United States of America…In the case of Apple, this could be resolved entirely by the US Congress changing the way in which they allow repatriation and allow…”

Murphy: “No, Brian, that’s no reasonable…”

Talk over each other

Hayes: “In the Irish case, just let me have my point, in the Irish case, there was an issue around stateless companies – that was remedied and the argument that has been made since then is how can you retrospectively apply this bill over a period of time? You’d have no surprise in my view Sean, that most of the cases on this top-level are being taken against small members states of the European Union – Belgium, the Netherlands, Luxembourg and Ireland. Countries that have, traditionally, certainly in the case of Ireland, have no industrial revolution, have since the 1960s got to open its doors towards inward investment and now we’re being asked, in terms of the entire corporate tax structure in Europe, to take these cases on. I have no doubt that the Government will want to appeal this decision. Firstly, to ensure, that the integrity of our revenue system for all to see. You cannot have a retrospective effect in corporate tax law and that has been applied. And the other argument I would make which I think is important from the Irish Revenue’s perspective is they are, we tax all monies generated in Ireland, profits generated in Ireland, where all of the changes that Michael Noonan has brought about: abolishing the double Irish, making sure that stateless companies registration was changed, changing the residency rules, that happened in the last number of years and that’s right that that should happen. We’re ahead of the OECD in this regard and it’s entirely right that those are in place now in Irish law.”

O’Rourke: “Richard?”

Murphy:I’m sorry, Brian, but I’m going to have to accuse you of using weasel words there. One of your key arguments was that this is a problem for the USA. What you were effectively saying, in your first intervention, was ‘Ireland couldn’t tax profits arising elsewhere’ and then you say, ‘the US should have profits, tax profits arising elsewhere’. You can’t have it both ways. This was not a US tax problem. It was a problem of tax not being paid in Europe and Ireland facilitating that by making sure that the tax was paid nowhere. There is no credibility in the Irish tax system. If you think there is, you are deceiving yourself. Around the world, people know…

Talk over each other

Hayes: “With respect…

Talk over each other

Murphy: “No, no, no, I’m allowed to say what I think here…”

Hayes: “And I’m allowed also to say what I think…”

Murphy:There is no credibility because Ireland did go out of its way to help, the same, by the way, as Luxembourg did, as Belgium did and as The Netherlands have. All are tax havens. You are sitting in a tax haven, Brian, and that tax haven has made a fundamental error…

Talk over each other

Murphy: ..equality in the world and it decided to undermine fair competition in the world and it’s time Ireland stopped doing this and actually put in a place a fair competition policy that the people of Ireland could be proud of.”

Talk over each other

Hayes: “I’d like to counter that ideological rant.”

Murphy: “It’s not an ideological rant, Brian.”

Hayes: “I have my say now, I have my say now. I fully accept that there were issues in the past that had to be resolved but under the last government and under commitments made by this current government, those issues are being resolved and you need to respect that…”

Listen back in full here

Pics: Rollingnews

55 thoughts on “Don’t Upset The Apple Cart

    1. Sheik Yahbouti

      PHIL HOGAN, BRIAN HAYES et al. As big a bunch of crunts as you could find anywhere on this planet. I wish them real and substantial harm, and I care diddly squat about what Harry and KFC think of my opinion.

      1. Harry Molloy

        thanks for thinking of me :-)

        your opinion is your own and your entitled to it. never worry about what I or anyone else thinks.

  1. Jake38

    Richard keeps taling about a level playing field and fair competition. There is no level playing field, and I can guarantee him the world is not a fair place.

    We’re not Switzerland. We’re a tiny pimple off an island, off the northern European continent. We lack advantages of size, location, geography and resources. Tax policy has been used for years to compensate us for our multiple disadvantages. If not that, what will we use?

    If we don’t

    1. pedeyw

      I agree in principle but do you not think a tax rate of 2% is a bit excessive, though? 12.5% is already lower than most countries and somehow apple have manged to avoid even that.

    2. Sam

      Don’t try to delude anyone that this is for our benefit or the national interest. The “ah poor us, sure we have to do something to get by” argument doesn’t apply here. This was done to benefit the shareholders, not the citizens.

      1. Sheik Yahbouti

        Sam, no truer word ever spoken. However, we are swamped by the ” we are not worthy-come and exploit us” fraternity, exemplified by young Jake, so things are more difficult than they might otherwise be. There are countries with similar or smaller populations, facing the same difficulties, who approach these matters in a different way. Perhaps we could take example from them, rather than the UK and others?

    3. Anomanomanom

      100% correct. If he wants a level playing field he’s mentally challenged, does he think we can compete with Germany, france, USA so on so on. We’d be worse off than the recession years.

  2. Harry Molloy

    is this a simple case of paying royalties to another company within your group I wonder?
    because all large corporates do that, often for good reason.
    am sure this must be more than that. for this ruling to be correct this must be an advantage that apple gets exclusively.

    1. Owen C

      Its about treatment of transfer pricing, how that interacted with royalty payments, and how that ultimately ended up in Apple’s “stateless” incorporations

  3. phil

    I wonder if the Apple workers paid income tax ? Someone enlighten me as to why the employees should pay? Then contrast that with the gist of Brian’s argument above …

      1. Martina

        Revenue went after people who did that recently – setting up companies but getting paid only from one client. It’s illegal so they should be expecting a letter in the post.

  4. Kolmo

    Ah, Hayes – The thoroughly inexplicable Tory-child extraordinaire – skipping to the tune of the big boys (of which he’s probably aiming for a seat on a board of when he gets out of his societally unhelpful stint in the politics racket)

  5. Junkface

    Brian Hayes is a creep. I met him before at an event. I didn’t want to, but the word weasel spring to mind immediately when you meet him. He’s talking nonsense here of course. The whole world knows the truth about Irelands tax deals for companies.

    1. realPolithicks

      Ireland is a very corrupt country, the government should either admit it and embrace the benefits or reject it and do something to clean up its act.

  6. Disgruntled Goat

    Hayes is talking out his hoop
    “You pay tax on what you generate in Ireland, Sean. You don’t pay tax for what you generate in the United States of America or elsewhere.” Go off and do some after dinner speaking the US there Brian and tell Revenue they can’t tax that income and see how you get on…..
    It’s depressing that a member of Government would go on the national broadcaster and make statements that show he lacks even the most basic understanding of tax residency rules.

  7. Tish Mahorey

    Brian Hayes is the political gofer of the corporate elite. A yappy little dog and Richard Murphy crushed him in this exchange.

  8. manonfire

    Brian Hayes is like a wind up toy, the above clip shows him in park mode, watch as he looks up in awe at Noonan, he looks so child like with the pen in his upper lip and then when he looks up to Noonan pontificating he almost looks like a little lost tyke

    Brian Hayes MEP

    1. Martina

      They did pay 12.5% but not on the billions they had salted away in the “stateless” Irish company.

    1. Condescending nana

      the government has been told by the Americans what’s going to happen to them if they so much as try to pocket a cent of that money

      1. some old queen

        No. The goverment has been told by corporations who used to be American but are under serve criticism from USA too now.

    1. Condescending nana

      lol, god no, really? thugs and anti-abortionists? mind you, same as what’s on now but still, no thanks pal.

    2. some old queen

      Seriously Frilly, if you think that then I go claim social security under a SF controlled office up north. Their incompetence is only matched by their ability to blame claimants for everything bar the bad weather.

  9. Truth in the News

    What country would allow themselves to forfeit 13 Billion plus the interest and then
    expect it citizens to pay water and property tax, its time Noonan was sent packing
    along with Kenny, and then challenge the decision using taxpayers money, funny
    how they never challenged any other European Directive or Decision
    This one will cost them, talk about rotten apples, the barrel and its contents stink.

  10. Cop On

    Pour encourager les autres.

    You can see the Government’s point. If they take the money then a) they are complicit and b) the tech multinationals will take all those foreign-language speaker millennials that are funding Fresh on Grand Canal Doc and Spar and Barrow street home with them.

    You can see everyone else’s view point: We already knows a) to be true and would love b) to happen.

    Take the money.

  11. jimmy russell

    ugh this is just anti-eu propaganda from bigoted racists the EU has our best interest at heart they will look after us if Apple leaves we should be moving towards a more integrated Europe anyway only bigoted racist like the brexit campaigners would differ

    1. manonfire

      Yea that sounds great, maybe we should join the “EU army” aswell and send our boys off to fight against Russia, is that the gist of what your saying Jim?

    2. Andy

      How many German, Italian or French car manufacturing plants do we have in Ireland?
      How many widgets do Krupps or Siemens buy from Sligo?
      How much wood are ikea buying from Wicklow?
      How many European microprocessor manufacturers are there in lexlip?
      How many European biopharma facilities are there down the south coast?
      How many Euro area tech giants or financial funds are employing thousands in Dublin?

      We’re a tiny, geographically handicapped country on the periphery or Europe. If the EU wants us to stop competing on tax, they can send a few hundred thousand well paid jobs our way. Until then they can ffff right off.

  12. Iwerzon

    Why does Brian Hayes looks like he has a bucket of sh1te around his neck every time he attempts a smile?

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