From top: Social Democrat TD Roisin Shortall and Taoiseach Leo Varadkar
In the Dail.
During Leaders’ Questions.
Social Democrat TD Roisin Shortall raised the Paradise Papers with Taoiseach Leo Varadkar.
Ms Shortall said:
“Taoiseach, I want to raise the issue of the Paradise Papers and the information which is now emerging in respect of Apple’s tax arrangements.
“The facilitation of these arrangements, by successive Irish Governments and the considerable negative impact which this is having on Ireland’s reputation.
“The central theme, running through the Paradise Papers, is the relentless quest of the wealthy and the powerful , the great and the good, to find ways of avoiding paying tax.
“We saw this most startlingly in the operation of the Double Irish and its use by Apple and the subsequent ruling by the European Commission that this favourable treatment constituted state aid.
“In that regard it certainly seemed 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 Septmeber of last year, 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.
“The public, generally, cannot understand why the Government should now be spending considerable, additional millions in appealing that ruling.
“Then Minister Michael Noonan’s position was very hard to understand.
“In 2013, he signalled that he intended to close down the Double Irish on which the 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 another tax-dodging deal.
“We know that following the closing of the Double Irish that Apple restructured their companies, that they registered two of their Cork companies in Jersey and took up tax residency in Ireland where their remaining Cork company Apple Operations Europe.
“This combined with the changes made to the Capital Allowance regime in 2014 allowed Apple to sell their IP back to the Irish registered company and avail of the massive tax breaks which this measure facilitated.
“So, Taoiseach, the questions are: Was our Capital Allowance regime changed to allow Apple to keep it’s 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?
“And how much has Apple benefited by this change?
“And how much as the State lost?”
Mr Varadkar said:
“The answer to your question is: No, or at least, not to my knowledge. It maybe a question that you want to put to the Minster for Finance who would have more information thanI do on those particular matters.
“I don’t have a detailed knowledge of any companies’ tax affairs or any individual’s tax affairs for that matter?
“Tax avoidance is very much an international problem. And international problems require international solutions.
“And, as we found, when it comes to dealing with tax avoidance, by large companies, once one country acts, the company just moves to another jurisdiction.
“That is why we need an international solution to this problem if we’re going to bring about a situation whereby companies pays their fair share of tax.
“In this regard, Ireland is an international leader. The OECD, the organisation for economic co-operation and development, based in Paris, is the international organisation that deals with taxation and deals with this area, making sure that companies aren’t able to exploit differences in tax law from one jurisdiction to the next.
“The OECD has designated Ireland as one of only 22 countries in a world of nearly 200 where we’re entirely tax compliant, or compliant rather with tax transparency
“And we’ve also signed up to information sharing. So we’re going to share information from one country to the next as to how much tax each company pays in different jurisdictions. That’s going to be very useful.”
…The Double Irish is gone. Stateless companies are gone as well. And also the current Finance Bill which is going through changed the way that we tax intellectual property.
“However we don’t accept at all that Ireland was involved in any special arrangement or state aid for Apple and that is why we are fighting that case.
“Because it’s simply not the case that Ireland was involved in State aid.”