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Ireland rejects blame in Apple tax row

Tuesday, May 21, 2013 - 02:47

May 21 - Ireland says it's not to blame for the low rate of tax paid by Apple Inc after a U.S. Senate report said the company had kept billions of dollars in profits in Irish subsidiaries and paid little or no taxes on it.But as Sonia Legg reports that's unlikely to be the last word on an issue which began with a Reuters investigation into Starbucks in the UK.

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"Don't blame us" - that was the message from Ireland as the global tax avoidance row engulfed its highest profile company. Apple has reportedly kept billions of dollars in profits in Irish subsidiaries in order to pay little or no taxes to any government. It's entirely legal and, says Ireland's Deputy Prime Minister, not the fault of the Irish tax system. (SOUNDBITE) (English) IRISH DEPUTY PRIME MINISTER, EAMON GILMORE, SAYING: "There is an international dimension to this. It needs to be tackled by having robust international agreements and ireland is very much in favour of that." Ireland's low corporation tax attracts many multi-nationals. A US government report says Apple has three Irish subsidiaries with no "tax residency". The main one includes all Apple retail stores in Europe. The reports says it hasn't paid any corporate income tax in the last five years despite receiving almost $30 billion in dividends from offshore affiliates between 2009 and 2012. It also accuses Apple of exploiting the rules. In its defence it says it doesn't use "tax gimmicks" and will pay more than $7 billion in U.S. taxes in 2013. But the moral indignation over tax avoidance is growing. What started with a Reuters investigation into Starbucks in the UK has grown into a massive global issue, says David Haigh from Brand Finance. SOUNDBITE: David Haigh, CEO Brand Finance, saying (English): "Companies do have a major problem and people are taking their custom elsewhere. But if they abide by the rules what are they supposed to say 'ok fine we will voluntarily pay extra tax.' I think it is a very difficult situation and really it's a cop out by governments to blame the companies - they should change the rules to make sure they do pay tax and then people wouldn't be angry." Lawmakers around the globe are now scrutinizing the taxes paid by multi-national companies. Google is under investigation in Britain and Hewlett Packard and Microsoft have been called to answer questions in the States. Robert Reich - a former US Secretary of Labor - says there needs to be a collective response. (SOUNDBITE) (English): ROBERT REICH, US SECRETARY OF LABOR, 1993-97, SAYING: "Every company is saying 'come here, come here' and these multi-nationals are playing governments off against each other. This is why it is so important for governments to get together, which is why it is important for example for Britain to stay in the EU and for the EU to act as a bargaining agent for all the citizens of the EU." Research firm Audit Analytics says large US companies boosted their offshore earnings by 15 percent last year to a record $1.9 trillion. As western governments struggle to tackle massive deficits it's perhaps no surprise that statistics like that are increasingly being scrutinized.

Ireland rejects blame in Apple tax row

Tuesday, May 21, 2013 - 02:47

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