herald

Wednesday 27 August 2014

Ireland is 'a doormat to firms like Apple' for tax

Barry O'Leary of the IDA. Photo: Tom Burke
Barry O'Leary of the IDA. Photo: Tom Burke

THE row over Ireland's low tax regime deepened today after a UK expert described the country as a "doormat state" for large companies.

The controversy surrounding Irish tax laws deepened as Taoiseach Enda Kenny travelled to Brussels where he was due to be grilled by his European counterparts amid damaging accusations that Ireland is a tax haven for major global firms.

Mr Kenny was expected to strongly defend our tax regime after it was claimed that technology giant Apple is using loopholes here to shelter tens of billions of euro in profits.

The Brussels meeting has been planned for some time – but coincidentally comes just a day after a US Senate hearing berated Apple for availing of loopholes in Irish tax laws which they say led to them avoiding the paying of billions of dollars in tax.

The issue of Apple's tax structure has created ripples of anger through the US since it was highlighted in a US Senate hearing on Monday afternoon.

The Senate claimed that the company had struck a special deal to pay low tax with the Irish government in 1980 when the firm set up here.

Meanwhile, it has emerged today that officials from the European Commission have contacted the Irish Government to express concern that special deals have been struck with major companies.

Any such agreement may be illegal under EU law and it would prove highly damaging to Ireland's reputation if it emerged that large companies like Apple have been given special treatment true.

Responsible

The focus on Ireland intensified today after a UK tax expert claimed we are a "doormat state" for large companies.

"Ireland is claiming today that it is not responsible for Apple paying low rates of tax. Quite emphatically that is not true," according to Richard Murphy of Tax Research UK.

"Ireland is completely complicit in this low tax rate and in the process is guilty of deliberately undermining the tax revenues of states around the world and of destroying fair competition in international markets," he added.

These claims were rejected by the Industrial Development Authority.

"In no circumstance is Ireland a tax haven," Chief Executive Barry O'Leary told Morning Ireland.

"Ireland competes on the global stage for investment and there are many, many countries that have good tax offerings, including individual states in the United States but countries like Luxembourg, like Belgium, like Holland, so there is global competition and tax tends to be one of the areas that Ireland competes for investment."

As Mr Kenny travels to Brussels he will have to deal with some of the fresh US claims.

It was claimed at a high profile senate hearing that Apple set up 'ghost companies' – which pay tax in no jurisdiction – as part of an agreement struck here in the 1980s.

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