Defending Our Integrity

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rbb

“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

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30 thoughts on “Defending Our Integrity

    1. Sheik Yahbouti

      Who, except Kenny, Noonan, Howlin et al, is queuing up to “defend our integrity”? What a joke. Orwell was more prescient than he could ever have imagined. Language has lost all meaning – black is now white etc.

  1. Jimmy 2 tones

    Everything this man says is 100% correct. No lies & no spin.

    Wait for all the government shills to comment now….

    1. Steve

      Nah I’m an FG shill, can’t stand him on most stuff but he’s 100% right on this .

      And if people accuse him of flip flopping on European Commission love…well so have the government.

      1. MoyestWithExcitement

        +1 They have to do what they’re told when the EU says we have to have water bills but when they tell us to tear up a dodgy deal with a rich yank, all of a sudden they’re concerned with sovereignty.

      2. Johnad

        Yep agree with you. They should be made pay the taxes. The thing is that 12.5% is still a great deal and probably the best deal they’ll get in Europe (if not the world), so where’s the problem in accepting the EU ruling?

      3. some old queen

        Steve: Nah I’m an FG shil…

        And there was me assuming you were a carnivorous bisexual transvestite from Letrim.

        Weird.

      1. Steve

        Ah Harry come on, I’ve heard the arguments about protecting Ireland and Revenues integrity / EU overreach / the MNCs jumping ship in their thousands and I don’t buy it. Cut all that out and This is about basic morality , fairness in society and individuals / corporations contributing to the wellbeing and upkeep of that society. This kind of stuff eats away at citizen buy in of such principles.

        Garrett Fitzgerald and Declan Costello would be turning in their graves

        1. :-Joe

          Well said but you’re definitely a poor mans FG shill btw….

          I think you maybe deluding yourself with the nostalgia of FG being more so-called centre-right and far less cruel or unusually punishing under Fitzgerald et al.

          If those days even existed, they’ve long since gone…

          :-J

  2. louislefronde

    Well, whether you like PBP or not and I wouldn’t share their normal economic philosophy, I have to agree with Boyd Barrett on this. The Irish state has colluded with a number of large global corporations to effectively defraud the tax systems of our European neighbours, not to mention Irelands. Time and time again over the years we have heard about the sanctity of the 12.5% corporate tax rate in Ireland and how important it is for FDI. But the truth is, these corporations are paying significantly less and are being aided and abetted in that regard by a combination of the state, large law firms and large auditing firms.

    Leaving aside the enormous sums involved for a moment, let’s focus on the Government’s continuing justification for the ‘arrangements’….namely jobs. These are but crumbs from the table when you consider the profits being earned and stored offshore. The question is what have these companies actually given back to the Irish people. Very little.

    I don’t see Apple building hospitals or clinics. I don’t see Facebook building apartments or homes for their staff in Ireland like they are doing in Menlo Park. Intel aren’t subsidising the transport network nor is Twitter contributing towards rural broadband. Nope, nada….nothing….just jobs. And while jobs are important, and there is a multiplier effect from buying local services. These companies are living off our infrastructure, and education resources which you pay for from your taxes and not theirs. This is fodder for thought, next time you look at your payslip.

    1. SB

      +1. I don’t like a lot of the man’s politics but this is scandalous, and the silence from the big parties shows how rotten they are. You’d HOPE that whoever authorised this at least thought they were acting in the country’s interests to bring in the big multinationals. The alternative – that we were sold out for a few Charvet shirts – would be even worse.

    2. Owen C

      There’s going to be around €7bn or so in corporation tax paid this year. That pays for roads, schools, hospitals, a transport system. They don’t provide “just jobs”.

      1. ivan

        yebbut wouldn’t that number be somewhat higher if certain corporations weren’t paying the thick end of sod all? Those same certain corporations appear to get a pass because jobs. Nobody’s doubting that those jobs pay well, that they have a knock on effect and so forth but the crux is that the corporation tax take *could* be somewhat higher.

        1. Owen C

          Apple paid 400mn to the Irish exchequer last year apparently. Is that “the thick end of sod all”? Of course we can debate whether they should pay more (they should), but its idiotic to suggest these companies only provide “jobs”. The exceptional strength of corporation tax receipts in recent years is one of the primary reasons the budget deficit has fallen as fast as it has.

          1. ivan

            there’s little to debate; we’re in agreement they should pay more. The problem is that you’re focusing on corporation tax receipts as a whole, and I’m focusing on the lack of corporation tax receipts from a few particular players. Apple’s one of them.

          2. ivan

            it’s not.

            But it should be a lot more. I appreciate that half a loaf is better than no bread, but that’s not a good enough argument….

  3. some old queen

    Ireland is the only country in the EU which allows MTD or YTD to be rolled back in finance software. Ireland is the financial wild west. Apple is only the start.

    1. Sheik Yahbouti

      “Wild West” that was us twenty years ago. Things are so much worse now. Vulture funds in the guise of Charities (courtesy of this Government) now stalk the land and any dodgy dealer can find a home here – provided the right palms are greased. I am convinced that our Teasock would advocate the buggery of small boys on what’s left of the lawns of Leinster House if the perpetrator promised ten jobs (preferably in Mayo).

  4. Eoin

    More pain caused by the state. It’s hard not to be a bit depressed by all this. But it’s all part of the learning process. Pretty soon everyone will be wide awake and fully aware of what a rotten little corrupt nation we are. Then we face a choice. Do we want to change or keep on taking the devils shilling?

    1. 15 cent

      well we had a choice in the last election, and the fuppers are still in power. FG who broke the entire country, only faced a punishment of being out of power for one term .. that was all .. one poxy term, and back in power. the election run was a disaster for FG, calamity after calamity .. and yet still voted back in. they must feel by this stage that they can do whatever the hell they want and it wont matter come election time. i find that severely depressing.

  5. Truth in the News

    When Boyd-Barrett has to make a speech like this, you’d ask how how come FF
    can’t, and that we allow the likes of FF and FG to run the country, and expect
    you and I to pay property and water tax and then assist Apple not to pay their taxes
    Its time to root them out of Office once and for all.

  6. Kolmo

    Good job Broadsheet for continually highlighting the bending over and financial violation and of the Irish Taxpayer, the Apple tax avoision (it’s a word) and yesterday, the NAMA Project Greasy Bastards, the BBC has done RTE’s job for them, the FBI and UK NCA are doing what the seemingly intentionally under-resourced Garda Fraud Squad should be doing. Revenue have so much criminal sanctions available to them if I mess up my very modest tax return, just short of public execution, but refuse to investigate substantial allegations about NAMA/Apple etc. big-shots, meanwhile it seems ‘government’ TD’s are scratching their nethers and whistling into the sky wondering when the Dáil canteen opens. Proper little banana and apple republic we have.

  7. :-Joe

    The fact that the FAIL chamber is empty while this is being said shows you the level of contempt that the government has for criticism and by extension the Irish citizens.

    I feel genuinely sorry for the woman who has been sent in to feel the hairdryer on behalf of Irelands absentee politicol landlords. I pity her naivety that she is part of a party that in other times of history would be taken out onto the street by an angry mob and executed for treason.

    Corporations are greedy and will try to get away with any savings to serve their shareholders. Politicians need to get the best deal and have a balance that is equally benificial for the economy. How could they have let it get so bad and why would they continue to defend it so easily? Isn’t is obvious. The majority of them are effectively traitors and criminals getting kick backs and favours promised to them for complying with big business and finance through various loopholes and good auld strokes with their colleagues and associates.

    The worse thing about this is the fact that it really is just the tip of the iceberg. The whole financial mess and austerity plan is orchestrated and coerced INTENTIONALLY in order to keep Irish people and the country in it’s place only to be slowly bled dry for all it’s worth.

    It’s ok though, nothing to worry about, it’s just the looney left getting it right like a stopped clock does twice a day. You don’t have to do anything, just keep voting against your own interests and in favour of your own demise…

    :-J

  8. 15 cent

    so will kenny and noonan know, that we now know of whats gone on? because they arent there, in the dail for this. and i want them to know that we know.

  9. Chris

    For every 1 billion you get 10k well paid jobs. So 190k from 19 billion that Apple owes us. That’s more than ALL the MNC jobs in Ireland.
    Well there goes that tired old argument for kissing the MNC’S asses all these years.
    Time for pitch forks!

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