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