Tag Archives: Apple tax

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Sinead Cusack and her son Richard Boyd Barrett during Bloomsday 2016

 

On Saturday.

On RTÉ’s Marian Finucane show, Ms Finucane interviewed actress Sinead Cusack who is also People Before Profit TD Richard Boyd Barrett’s mother.

After Ms Cusack gave birth to Mr Boyd Barrett in 1967, he was adopted by Valerie and David Boyd Barrett in Dun Laoghaire. Ms Cusack and Mr Boyd Barrett were reunited some years later.

During the interview..

Marian Finucane: “Well, I mean, it’s well known now, that your son is People Before Profit and all of that. And you found him years…”

Sinead Cusack: “My son is not just People Before Profit. My son is Richard.”

Finucane: [laughs] Well, your son, Richard, of People Before Profit is where he would be known mostly by our audience. What age were you when you became pregnant?”

Cusack: “19.”

Listen back in full here

Earlier: Taking The Michael

Top pic: Dara Mac Donaill/The Irish Times

Meanwhile…

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The panel of the Marian Finucane show on September 4: Fianna Fail TD John McGuinness; Suzanne Kelly, a tax lawyer; Patsy McGarry, religious affairs correspondent at The Irish Times; Professor of Modern History  Diarmuid Ferriter; and Senator Michael McDowell

Anthony Sheridan of Public Inquiry writes:

To whom it may concern:

I wish to lodge a formal complaint against RTE for breach of its Public Service Statement 2015.

My complaint centres on the biased panel selection on the Marian Finucane Show as broadcast on Sunday, 4 September last.

Specifically, my complaint concerns the unbalanced and unchallenged views expressed during the discussion surrounding the Apple tax scandal.

The panel members were as follows:

Michael McDowell: Independent Senator and former Tanaiste and Minister for Justice.

Suzanne Kelly: Tax lawyer.

John McGuinness: Fianna Fáil TD

Patsy McGarry: Irish Times Religious Affairs Correspondent.

Diarmuid Ferriter: Professor of Modern History at UCD.

It is reasonable to describe all the panel members and the presenter, Ms Finucane, as individuals with conservative views that are mainly in line with the governing establishment.

It is also reasonable to describe the two politicians on the panel as public representatives with strong and uncompromising views on the political outlook of those who oppose the Government’s response to the Apple tax scandal.

Left wing political parties such as Sinn Fein, Anti-Austerity Alliance, People Before Profit and others who represent a significant percentage of the population were, by their exclusion, prevented from expressing a contrary view.

This is in breach of RTEs Public Service Statement 2015.

I quote:

Ensuring its treatment of current affairs and matters of public controversy, in addition to being impartial and objective, is fair to all interests.

It is also clear that RTE management is very well aware of the major changes taking place within Irish society.

I quote:

RTÉ today sits within a society, economy and media environment that is changing; and changing rapidly. Recent years have shaken public confidence in institutions and traditional authority.

Despite this awareness, or perhaps because of it, RTE management seems to be abandoning its objectivity and professionalism in favour of taking the side of State/Government.

The apparent packing of a discussion panel in favour of one side of the debate is also in breach of RTEs duty in law to be impartial.

I quote:

RTÉ has a duty in law to be accurate, fair and impartial, and to remain independent from all state, political and commercial influences.

Yours sincerely

Anthony Sheridan

Formal complaint against RTE for bias (Public Inquiry)

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Fine Gael TD Kieran O’Donnell, Fianna Fáil TD Lisa Chambers, Vincent Boland, Ireland correspondent at The Financial Times and Independent TD Catherine Connolly

Last night.

On TV3’s Tonight with Vincent Browne.

The panelists were Fine Gael TD Kieran O’Donnell, Fianna Fáil TD Lisa Chambers, Vincent Toland, of the Financial Times and Independent TD Catherine Connolly.

From the discussion:

Kieran O’Donnell: “Firstly, Vincent, America is made up of 50 states, right? So I see that as one..”

Vincent Browne: “Oh, really? 51 states.”

Catherine Connolly: “52 [inaudible].”

O’Donnell: “51 states, I stand corrected. 52, look, well, whatever. ”

Talk over each other

O’Donnell: “Companies have, in the main, pay federal tax, right? So I don’t buy the argument. Europe is made up of distinct countries with their separate tax laws, right? That’s number one. And I think that, number two, the Revenue Commissioners have operated independently of Government…they operate independently of Government and I think that’s why we have a situation whereby that, if Government ministers were aware of every ruling with or with the opinion given by Revenue Commissioners, people would say that’s interference, you can’t have it both ways, so, effectively we have a separation…”

Connolly: “I actually don’t want it both ways but ye want it both ways.”

O’Donnell: “We don’t.”

Connolly: “You do. You want to be part…”

Talk over each other

Lisa Chambers: “Catherine, is this a state aid matter or is it a taxation matter? State aid should not encroach on taxation matters and it is a fundamental principle..”

Vincent Browne: “I would say the opposite..”

Chambers: “It is a fundamental principle of taxation law that it should not apply retrospectively. This is going back 25 years. 25 years.”

Connolly: “That’s not accurate, sorry, it’s not accurate, it’s not 25 years.”

Browne: “This is quite wrong.”

Connolly: “That’s not accurate, the second thing is, we’re a part of Europe, ye have endorsed Europe, you’ve endorsed the Commission and their rules and now that it doesn’t suit you…”

Chambers: “But if one of the rules that… a country defines its own taxation law…”

Connolly: “One of the basic rules is you cannot give state aid selectively and that’s the crux here, on top of the other crux…”

Chambers: “But it’s a taxation matter…”

Browne: “Ah, Lisa…”

Chambers:It is not state aid, I’m sorry, it’s incorrect.”

Connolly: “The commission is saying that you treated Apple selectively. You gave them special treatment, compared with other companies. You’re saying ‘no we didn’t’.”

Chambers: “But why are you backing the commission and not your own country?

Connolly: “I’m not backing anything. I’m looking at the judgement.

Talk over each other

Vincent Boland: “It’s not a question of patriotism. It’s a question of law and of policy and of…”

Chambers:Sovereignty and taxation law.”

Watch back in full here

Thanks John Harrington

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“I wish to address the integrity of our tax system. The laughable suggestion is that we must lodge the [Apple tax ruling] appeal in order to defend its integrity.

The first of the tax rulings was in 1991, the era of Ansbacher and Charlie Haughey. Via Ansbacher accounts, the Irish rich had been siphoning off money that was onshore but supposedly offshore since 1971.

Only political pressure, outrage and exposure, not Revenue, forced the establishment of the McCracken tribunal.

It was only in 1999 that Revenue finally decided to start investigating the matter and uncovering the funds. Is our tax system so covered in glory that we would not question its integrity? I am afraid not.

The tax ruling of 2007 is what I really want to discuss. Something was raised at the committee about which we were not allowed to ask questions of Apple and Facebook because the Government side turned off the cameras and voted down the proposal.

A paper produced by the Department of Finance, authored by Mr. Seamus Coffey, showed some of the figures. Nobody bothered to read them, as is so often the case, but the truth is in them.

I refer our economic and political correspondents to pages 27 and 28 of the Department’s paper on Ireland’s effective corporate tax rates. They show something incredible.

The average amount of what are called deductions – parts of companies’ profits that can be written off from their tax liabilities as costs – jumped from an average of approximately €2 billion in 2004 and 2005 to €21 billion in 2011.

God knows what they were subsequently, as we do not have the figures and cannot get them from Revenue for four or five years after the fact, which is another scandal.

The amount of tax at 12.5% that these companies could write off jumped over four or five years by €19 billion.

The greatest jump in that write-off came after the 2007 ruling, when it increased from €6 billion to €19 billion before increasing to €21 billion within a year or two.

It may well have increased much more afterwards but we do not have those figures. We need to see them.

From 2007, total taxable income in the corporate sector dropped from €56 billion to €37 billion. That nearly €20 billion is almost exactly the same as the deductions allowed.

The paper helpfully mentions that this can be explained by patent royalties paid by certain multinationals to their subsidiaries. The ruling gave them certainty that they would be allowed to write their own tax bills indefinitely. The Government colluded to cover this up until now.

The paper that the Government distributed last night and that is also a part of the cover up helpfully tells us about a few points.

In 1991, a basis proposed by Apple for determining the net profits of Apple Computers Accessories, now the ASI branch, was agreed by Revenue.

Apple told Revenue that it had a proposal on how the latter should calculate its profits. It did that again in 2007.

Does any other taxpayer get the opportunity to tell Revenue how to calculate his or her tax bill?

This is the Government that will deduct unjust property taxes from people’s wages if they do not pay. This is the Government that will send police out against anti-water charges protestors because they are unable or unwilling to pay unjust water charges. This is the Government that inflicts the brutal austerity imposed by the troika to pay off the gambling debts of banks and financial speculators regardless of the hardship suffered by ordinary people.

When it comes to Apple, Google and Facebook, however, we protect them and they can make their own tax arrangements.

This is what happened. No arm’s length principle, no equality, no tax justice. They tell Revenue how to calculate their tax and Revenue does it.

Please do not tell me that, when the allowable deductions from profits jump by approximately €18 billion or €19 billion in two or three years, the Government and Revenue did not notice or that the Government did not know that these profits were being shifted to companies that had tax residencies nowhere in the world.

…Everybody knew that they were involved in massive tax evasion but we chose to turn a blind eye and, indeed, to put in place the mechanisms that allowed them to do it.

We then resisted the calls to close down that loophole. The Government now claims that it has done so but it has given a sunset clause under which the same companies and no other can avail of the double Irish until 2020.

In the meantime, the Government has developed a patent box that will allow them to do the same thing in a different way, that is, write off the profits generated from upgrading an iPhone or Apple computer against the cost of new innovations and developing new patents.

Apple is appealing, so we will not be able to spend the money anyway, but how much weaker would Apple’s case be if the Government accepted the ruling because it was true that we had done something wrong?

Everyone knows that we gave selective advantage to these corporations. I have just provided the hard evidence contained in Revenue’s tables, which show that Revenue must have known.If it and the Government did not notice this scale of profit shifting, they should be flung out on their ears. Of course they noticed it.

If we put up our hands and admit that this was wrong and that, as everyone knows, these companies were evading tax to the tune of billions of euro, Apple’s case against the European Commission would collapse.

Maybe Apple would pursue it, maybe it would not, but its case would be significantly weakened if we did the honest and fair thing from the point of view of our citizens.”

Richard Boyd Barratt TD of people Before Profit/Anti-Austerity Alliance speaking during today’s debate on the Apple Tax ruling appeal.

Transcript via Oireactas.ie

Earlier: The Apple Deal Explained

memorandum

The Department of Finance have sent out a briefing document to TDs ahead of today’s debate on the EU’s Apple tax ruling.

In 1991, a basis proposed by Apple for determining Apple Computer Ltd’s Irish branch net profit was agreed by Revenue.

According to that ruling, the net profit attributable to the AOE branch would be calculated as 65% of operating expenses up to an annual amount of  $60- 70 million and 20% of operating expenses in excess of $60-70 million.

This was subject to the proviso that if the overall profit from the company was less than the figure resulting from this formula, that lower figure would be used for determining net profits of the branch.

Operating expenses included in the formula were all operating expenses incurred by Apple Computer Ltd.’s Irish branch, including depreciation but excluding materials for resale and cost-share for intangibles charged from Apple-affiliated companies.

In 2007, a revised approach for remunerating the Irish branch of AOE was agreed which was based on:

(a) a 10-20% margin on branch operating costs, excluding costs not attributable to the Irish branch, and

(b) an IP return of 1-9% of branch turnover in respect of the accumulated manufacturing process technology of the Irish branch.

Sweetheart deal, state aid or nothing to see here?

Only YOU can decide.

Read the document in full here

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From top: Steve Jobs in Ireland,1980; The sources of iPhone’s technology; Ciara Graham

Apple is no stranger to state aid and while its founder is often hailed as one of the world’s greatest tech innovators the reality tells a very different story.

Ciara Graham writes:

Italian-American economist Mariana Mazzucato explains how Apple exploits technologies that were developed AND crucially funded by the US State.

Many of the technologies found on the modern iPad or iPhone were developed by the Advanced Research Projects Agency (ARPA), founded in 1958, during the Eisenhower administration.

It is responsible for the early development of microprocessors and micro hard-drive technologies, and ultimately the internet itself.

Technologies such as Global Positioning Systems owe their origins to state funded military projects and Liquid Crystal Display technologies were funded by the National Science Foundation (NSF). Swiss-based CERN, the European Centre for Nuclear Research contributed the source of the hypertext languages, used in web browsing and also the basis for Apple’s famous ‘click-wheel’.

All those well-known Apple innovations turn out not to be Apple’s after all.

Mazzucato says:

 “Mission-oriented public investment put men on the moon, and later, lead to the invention and commercialization of the Internet, which in turn has stimulated growth in many sectors of the economy…the US government has been a leading player in funding not only the Internet but all the other technologies — GPS, touchscreen display, and the new Siri voice-activated personal assistant — that make the iPhone, for example, a miracle of American technology.

What Apple is especially good at – and we’re not taking it from them – is design.

They have done an excellent job of pulling together some very useful technologies and installing them on ergonomic and aesthetically pleasing devices; turning these technologies into something consumers really want to buy is their great talent. They are a wonder of marketing, certainly.

But let’s not fool ourselves that they invented the technologies that their products are famous for; and the idea that they should be entitled to any proprietary rights to the technologies that they exploit is very very questionable indeed.

Apple makes billions. They do this off the back of technologies that were developed using government funding.

Fabled for their secrecy, Apple operate a closed technology platform (where only pre-approved programs and applications can interact). Given the publicly funded origins of many of their technologies,

it is ironic that Apple should be so guarded about the proprietary rights protecting their product innovation.

Apple initiated litigation against its key partner and competitor, Samsung, for patent infringement – a saga which has become known as the ‘smartphone patent wars’(3) and has seen subsequent litigations against Motorola and HTC(4).

Apple was also incensed by the open source nature of Google’s Android platform – which gives free access to manufacturers and developers – deeming it an “existential threat” to the company’s existence.

The company’s founder and former CEO, Steve Jobs, was so incensed by the unrestricted accessibility of the platform that he believed Google had “ripped off the iPhone…grand theft!”

He swore to spend “every penny” within Apple’s coffers to “destroy Android”.. More than a little contradictory for a company that owes its successes to publicly funded technologies – share and share alike Steve!

In addition to this legal state aid from the US, Apple has also benefited from what we now know to be illegal state aid from Ireland.

Ireland doesn’t have the budgets (nor the impetus) that the NSF does, but, according to the European Commission it has helped Apple to avoid its tax obligation across the globe. It deemed that through two tax rulings, in 1991 and 2007, Apple had been granted selective treatment.

Essentially, Ireland’s reluctance to take tax from Apple amounts to “illegal state aid” which gave the company an “unfair advantage” over its competition.

Paradoxically, the Commission is not doing this for the public good, but because it amounts to unfair competition over other market-led corporations.

This makes it very difficult for the Irish government to defend as the EU position does not run contrary to the government’s market-liberal policies one bit. Essentially, the Irish government is being hoisted up by its own free-market ideals.

This reminds us of the controversy – or lack thereof – surrounding the early days of the bank bail-out, when only real opposition trotted out was that it might be unfair to European banks!

We’re all familiar with Benjamin Franklin’s oft-used saying about the certainty of ‘death and taxes’. Tax is the money the State ‘earns’ in order to pay for everything it needs to provide for its citizens, and for the continued functioning of industry and commerce – the roads, the energy networks, the educated workforce – it’s part of the social contract.

Yet, so beholden have successive Irish governments become to companies like Apple over the promise of jobs that the State it seems is willing to overlook any other obligations these Multi National Corporations (MNCs) might have to their adoptive homes.

In the early days of the post-war years during the New Deal and Marshall Plan, when governments were actively rebuilding economies on both sides of the Atlantic, governments had the reasonable assurance that the investments they made in developing industry would come back in taxes.

But the new reality of global business – of tax inversion and tax sheltering – is destroying that pact; and perhaps jeopardising the very social contract in the process.

Ciara Graham is Lecturer in Business at the Institute of Technology Tallaght..

References:

Mazzucato, M. (2015) ‘The Entrepreneurial State’: Debunking Public vs. Private Sector Myths. London: Anthem Books.
Mazzucato, M (2013) “The Entrepreneurial State: Apple Didn’t Build Your iPhone; Your Taxes Did” PBS Newshour, Available at: http://www.pbs.org/newshour/making-sense/the-entrepreneurial-state-appl/ Accessed: August 30th, 2016.
“Apple Inc. v. Samsung Electronics Co. Ltd. et al.”. United States District Court, Northern District of California. Retrieved August 11, 2012
Barrett, Steve (2012) “Apple’s War on Android”, Bloomberg. Available at:
http://www.bloomberg.com/news/articles/2012-03-29/apples-war-on-android Accessed: August 31st, 2016.
Patel, Nilay (April 19, 2011). “Apple sues Samsung: a complete lawsuit analysis”. The Verge. Vox Media. Retrieved August 11, 2012

Thanks Henry Silke

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Minister for Public Expenditure and Reform  Pachal Donohoe (right) and The Fine Gael Minister for Finance Michael Noonan  at Government Buildings this afternoon

This afternoon.

With the Cabinet agreeing to appeal the decision that ireland gave illegal state aid worth 13bn Euro to Apple….the following is reportedly what was agreed:

1. Arrange for annulment proceedings to be brought before the General Court of the European Union (GCEU) on State aid SA. 38373 (2014/C)(ex 2014/NN) (ex 2014/CP) implemented by Ireland to Apple;

2. Request the Attorney General to prepare the legal grounds in support of those proceedings and to take all other steps incidental to the conduct of those proceedings;

3. Propose the following motion before Dáil Eireann:

That Dáil Éireann:

(i) Supports the Government decision to appeal the European Commission’s decision that Ireland provided unlawful State aid to Apple.

(ii) Commits itself to the highest international standards in transparency in the taxation of the corporate sector;

(iii) Resolves that, no company or individual receives preferential tax treatment contrary to the Tax Acts and calls on the Revenue Commissioners to continue to observe this principle;” and

4. To reaffirm Ireland’s 12 and half per cent corporation tax rate

5. To arrange for a review of Ireland’s corporation tax system by an independent expert to be appointed by the Minister for Finance, excluding the 12 and half per cent corporation rate.

Fight!

Apple ruling is aimed at harming Irish tax regime, claims Noonan (Irish Times)

Apple and state aid: the end of the affair (Vincent Boland, Financial Times)

Earlier: Apple Green

Rollingnews

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This morning.

Leinster House, Kildare Street, Dublin 2

Emily Duffy (as Snow White) with an open letter signed By 10,698 people on behalf of campaigning group Uplift. To wit:

Dear Minister Noonan

Everyone has to pay their tax and that includes Apple, one of the world’s most wealthy corporations. When they’re allowed to avoid paying their tax bill, we all suffer.

As the Minister for Finance you have a duty to protect and safeguard the interests of every man, woman and child in Ireland. You claim you do not have enough money in the public exchequer to ensure quality healthcare for everyone; to properly resource our schools and universities; to ensure every worker has a living wage, to end homelessness. Apple’s tax bill would go a long way to solving these problems.

We, the undersigned, remind you that you have a choice and an opportunity to stand up for the people of Ireland over the interests of Apple. We call on you to not appeal the decision that Apple owes Ireland €13 billion. Don’t stand in the way of Apple paying what they owe.

FIGHT!

Earlier: Apple Green

Rollignnews

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This morning.

Government Buildings, Dublin.

Cabinet members arrive to discuss the Apple tax brouhaha.From top: Finance Minister Michael Noonan, Shane Ross and Finian McGrath; Katherine Zappone and Leo Vardkar

Apple tax ruling: Irish cabinet discusses appeal (BBC)

EU Commissioner Warns Other Firms Could Get Apple Tax Treatment (Fortune)

Earlier: This An Argument About Competition

Rollingnews

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From top: The panel on last night’s Prime Time and Dr Aidan Regan, of UCD

Last night.

On RTÉ’s Prime Time.

The panel – Eoin Fahy, chief economist with KBI Global Investors, Minister for Housing Simon Coveney, Anti-Austerity Alliance TD Ruth Coppinger and Dr Aidan Regan, from the School of Politics and International Relations in UCD – discussed the Apple tax bill with presenter David McCullagh.

During the discussion…

Dr Aidan Regan: “This is the crucial point that really wasn’t picked up either, in the preceding interviews, the ruling that the Commission have issued basically states that Ireland should apply its tax laws, 12.5% consistently.

“It’s basically said that allowing Apple to set up a subsidiary, split it into two companies, allow them to transfer the sales profits to one of those companies, the head office, that is basically stateless, it’s in the cloud, ensures that they don’t pay tax – call it aggressive tax planning, call it corporate tax avoidance.”

“Now the point from the Commission’s perspective is that that’s perfectly legal and it has been legal. Now, the Government has since closed it. The argument of the Commission is that’s illegal state aid. So this is an argument about competition. The Commission is saying that Ireland has broke the laws of the European Union by facilitating a large multinational to have comparative advantage over its competitors in the market.

“So it’s not actually saying Ireland’s laws were wrong, it’s not about morality, it’s not about legality. They accept that was perfectly legal. They’re pointing out that it’s illegal to facilitate a company, like Apple.”

David McCullagh: “But that only applies if other companies didn’t get similar treatment and there doesn’t appear to be any evidence that if another company had come along and asked the same question that Apple asked, that they wouldn’t have got the same answer. In fact, it’s probably pretty obvious that they would have got the same answer.

Dr Regan: “Possibly and this, I think, is what we don’t fully know. The full ruling is confidential and I would be very curious to see precisely what it was about those two particular tax rulings in 1991 and 2007 that clearly signal to Apple that it was OK for them to avoid paying the 12.5% by transferring their profits to another company and effectively pay zero.”

Watch back in full here

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DAVOS-KLOSTERS/SWITZERLAND, 31JAN09 - Joseph E. Stiglitz, Professor, Columbia University, USA, at the Annual Meeting 2009 of the World Economic Forum in Davos, Switzerland, January 31, 2009. Copyright by World Economic Forum swiss-image.ch

From top: Minister for Jobs Richard Bruton and economist Joseph Stiglitz

This morning.

On the Today with Seán O’Rourke show.

Fine Gael Minister for Education and Skills Richard Bruton, Anti-Austerity Alliance TD Paul Murphy; former IMF director Donal Donovan, and Irish Independent editor Fionnan Sheahan were on the panel to talk about the Apple tax ruling.

Later in the show, Nobel prize winning economist Prof Joseph Stiglitz spoke to Mr O’Rourke.

Grab a tay.

Richard Bruton: “The principle, that the Irish Revenue authorities ruled on in 1991 and in 2007 was a standard approach. The principle that they enunciated was that a company, based in Ireland, should pay tax on its Irish activities and that was the ruling that was applied but what the EU is trying to now used state aid rules to do is to say that Ireland should become the international policeman for dealing with worldwide problems where companies are seen to play one tax code off against another. Very specifically, in relation to the US situation as you know, they offer a deferral tax system where the liability for tax in the US, which is obviously legitimate ultimately by companies like Apple, where all their research and development goes on – they allow a deferral so that tax is not brought back to the US authorities. But the EU itself has recognised that this €13billion is not available to Ireland because the US, it recognises that the US has a legitimate interest in getting access to this tax revenue and, indeed, their deferral rules would see that revenue taxable in the US and Apple have said that so Donal [O’Donovan] is simply wrong. The [EU] Commission isn’t authoritative on this issue, they are seeking to break entirely new ground…”

Sean O’Rourke: “Well no, what they’re doing is using the rules on the single market which prohibit member states from tailoring special inducements to incur rich companies to locate operations on their soil and the very fact that we allowed Apple, and we connived with Apple nationally, not necessarily breaking any of our own rules, but we allowed them to use Ireland as the basis for this, effectively, non-existent headquarters – no employees, no activity, to put money offshore and to avoid paying tax. It stinks to high heaven and we’ve been caught out on it and maybe we should just accept that fact.”

Bruton: “No you’re wrong, Seán. Ireland has a substantial substance from companies like Apple, 350, 000 over all. In the case of Apple, it’s 6,000 employees and they have paid tax on their earnings in Ireland.”

O’Rourke: “But why do we allow, why do we allow the to pay virtually no tax on their worldwide earnings or 90% of them…”

Bruton: “We apply…”

O’Rourke: “Why do we facilitate that?”

Bruton: “Don’t talk me down when I’m trying to answer….”

Later

Bruton: “The EU wants to make Ireland some sort of international tax policeman which would be entirely negative to our interests and so many countries invested here.”

Paul Murphy: “…This argument by Fianna Fáil and the Government is utterly disingenuous and dishonest. The idea is that somehow Ireland stumbled into this situation of being a tax haven and different companies are managed together in the different loopholes of different countries and they all just happened to set up in Ireland. It was designed to do that. That’s the point of the tax ruling in 1991. So it isn’t about the [EU] Commission now asking Ireland to be a tax policeman in retrospect, because in 1991 and 2007, a ruling was designed to say to Apple: we don’t mind if you come here and you set up Apple Sales International and Apple Operations Europe. And you have head offices that have nobody working for them whatsoever and you funnel through $22billion of profits a year, in the case of Apple Sales International and, don’t worry, we won’t charge you tax on it. So we didn’t stumble into this situation, it was a designed thing and now the Government is trying to like make things not clear because the Government has a real problem on it.”

O’Rourke: “Donal, you don’t often agree or nod when Paul Murphy is speaking but you’re nodding vigorously there.”

Donal Donovan: “Well, you know, you’re right, I don’t often agree with Joseph Stiglitz either but actually I do think there’s a great deal of truth in what Paul says. This is something that has not happened by accident. This is a long-plan strategy and we did remove parts of this last year, and the year before but we did so at the point of a gun. I mean Minister [for Finance] Noonan was quite right when he removed the ‘double Irish’ and his [inaudible] residency but he waited until he had absolutely overwhelming pressure arising for the US and elsewhere and public opinion. And I think we’ve been on the back foot of this, Sean. We have reacted when we’ve been pushed into reacting, there’s no doubt about it that we have not been proactive in earlier years in trying to change the situation. And really, it’s a much bigger issue than the technical question of the legal matters who approved what in 1991. Really this has become a political and moral issue. We’ve seen ever since the US Congress held hearings, we’ve seen it with Panama Papers, Lux Leaks, everything, our 26% [rise in GDP] figure is related to this. All of this, the world is changing and, again, I wouldn’t always agree with Fintan O’Toole on many things but, this morning, he said we have to be on the right side of history and we should get on the right side of history.”

O’Rourke: “So, Richard Bruton… if the situation is changing, and you’ve highlighted yourself how the Government had introduced measures last year, if the situation is changing, why don’t we sort of shrug our shoulders and say to Apple, ‘look, sorry guys, the world is moving along, you’ve got a massive cash pile, something in the order of, is $230billion, we have to take a sizeable slice out of it’, the rules have changed and maybe we’re not going to lose a load of jobs if we do that.”

Donovan: “Well I think that’s right because the arrangements that gave rise to this, you’re absolutely right, have been changed already so it’s not that we’re relying on this to continue in the future… we should do the right thing and make up for it.”

O’Rourke: “Could we not take that approach, Richard Bruton?”

Bruton: “No, because we have established in the OECD a process whereby these sort of reforms will be done on a collective basis, with countries acting together and that is the approach that has already brought the sort of changes we’re talking about where, the way in which companies can aggressively play one tax off, one country off another is being wound back. There is numerous examples of where that occurs in the treatment of interest, the treatment of capital, the treatment of company resident, the treatment of intellectual property, the treatment of deferral of tax and so on and what we have to do is collectively sit down and work out agreements that will be applied universally. What the EU wants to do is to make Ireland the international policeman – to go out and say to the US, ‘you should not be applying deferral system’, ‘you should be collecting money from Apple straight away’ so Ireland should go and collect that money….Let’s not forget that if the word of the Irish authorities, independent Revenue Commissioners, independent of Government, if that cannot be relied upon, on companies who have invested and employed 350,000 people in Ireland, up and down the country…”

O’Rourke: “But we gave our word and then showed we were up to no good. We were conniving with these guys to avoid paying tax…”

Bruton: “That is precisely what we will be fighting to appeal against. There is no, it is not the case that we were conniving with anyone. We made legitimate rulings with the Revenue Commissioners made independently and they offered their opinion and companies have made their decision…”

O’Rourke: “But to quote [European Competition] Commissioner Margrethe Vestager yesterday, if my tax bill was 0.05%, falling to 0.005%, I would think I would need to have a second look.”

Bruton: “But those are bogus numbers because what that ruling is saying is that the activities of Apple in the US, where they do all their research and development, their manufacturing in China, should be taxed, that tax should be collected in Ireland. There is no basis for that, the US authorities will collect tax from Apple on the so-called deferral system that they have and, as you know, this is hotly debated in the US, how they should reform that and whether they should have instruments to bring that money…”

Later

Donovan: “I just want to say…if the Minister Bruton could say: when these rulings were issued in 1991 and 2007, and I accept that they were rulings by the Revenue, did the Revenue check with Brussels at the time, as to whether these rulings were, or would be considered consistent with state aid rules? Because if we went ahead and did them, and issued them without getting the OK from Brussels, then we can’t really complain if, later, Brussels, says: ‘well, no I’m sorry you did these rulings but they were illegal.

O’Rourke: “Minister?”

Bruton: “These are rulings on tax matters and the Irish authorities took a view that is absolutely common across tax world that you are taxed in the jurisdiction on the activities in your jurisdiction. The issue then around tax structures that companies have – that involves much more elaborate collaboration across the system and we’ve sent up vents to precisely address that, this process at the OECD…”

Talk over each other

Murphy: “Minister, you know you’re being dishonest there, you do. You know that the thing was set up to facilitate it, that’s the point of the tax rulings and I think the Government’s spin around this is designed to make it seem all so very complicated right.”

Bruton: “That is not the case.”

Murphy: “And the reality is extremely clear: one of the biggest, multinational corporations in the world didn’t pay tax to the tune of €13billion-plus. It’ll get close to €19billion when you add on interest to Ireland and we are owed that tax. Now, Government would like to make it seem. Yesterday they said, first of all, well, at least the Commission has given us a clean bill of health in terms of Google and Facebook, the Commission had to come out and say, ‘no, we haven’t, we haven’t looked at them’. Then, the Government said, ‘but sure even if we got the money, we could only spend it on paying down the debt’, the Commission came out and said, ‘no, that’s not the case, you can spend it on capital expenditure. And the Government has a major political problem – this is their bank guarantee moment..”

O’Rourke: “And this is my cue to bring in [Irish Independent editor] Fionnan Sheahan. Just speaking of the Government’s political problem. Do you think they’re going to give us a decision today based on Michael Noonan’s recommendation – an immediate decision to appeal?”

Fionnan Sheahan: “No. I think, as Donal has said, they will take time to assess the ruling. You said at the start, the Government’s decision was to appeal – that was half the government the other half was saying something very different. And if you look at the government’s handling of this: the European Commission versus our Government has been a bit like {Danish TV series] Borgen versus Ballymagash [fictional rural town in RTÉ’s Hall’s Pictorial Weekly]. We have Margrethe Vestager basically cleaning us out for an hour yesterday on the steps of the European Commission building, quite authoritatively setting out her case on the basis of the European Commission’s ruling and then we have Michael Noonan basically floundering around, talking about all folksy tales about seed potatoes and so on and so forth. Well, to give you an old folksy analogy to match that: she ate him without salt. And I think there are major questions about Michael Noonan’s handling of this entire affair over recent months.”

Meanwhile, later in the show, Nobel prize winning economist Prof Joseph Stiglitz also spoke to Mr O’Rourke, saying:

“I think they’re [the Irish Government] wrong [to appeal]. I think, it was an interesting discussion [above]. I thought, to put it frankly, what the minister was saying is all utter balderdash. The fact is that you were encouraging tax avoidance, you knew it, let’s not make any pretence about it. You got  a few jobs at the cost of stealing revenues away from countries around the world and that’s the kind of activity that has to be stopped.

Listen back in full here

Meanwhile…

Screen Shot 2016-08-31 at 13.20.35

Last night.

On RTÉ’s Six One.

Minister for Finance Michael Noonan spoke to Brian Dobson about the ruling.

During their discussion, Mr Noonan said:

This isn’t a moral issue. This is a financial and a taxation issue.”

There you go.

Watch back in full here