European Commission seeks details of Apple tax in Ireland

Competition commissioner Vestager says ‘Don’t hold your breath’ for inquiry verdict

Cathy Kearney, Apple vice-president for operations based in Cork: “We’ve paid every cent of tax that’s due in Ireland. We don’t feel that there has been State aid.”
Cathy Kearney, Apple vice-president for operations based in Cork: “We’ve paid every cent of tax that’s due in Ireland. We don’t feel that there has been State aid.”

The European Commission has sought extra information from Irish tax authorities relating to the ongoing investigation into Apple's tax arrangements in Ireland, potentially delaying further an outcome of the state-aid probe.

Commission representatives wrote to Irish authorities last week, seeking further information pertaining to the case. It follows the submission by the Revenue Commissioners of additional information to the European Commission in late January.

More than two and a half years since the European Commission first opened a formal investigation into tax rulings offered by Ireland to the US multinational, the probe is continuing, despite the fact that the Commission has delivered its verdict on similar cases relating to Fiat in Luxembourg and Starbucks in the Netherlands.

Despite speculation in Brussels that a verdict could be delivered in April, the EU's competition commissioner, Margrethe Vestager, dampened expectation of an imminent decision last week when asked about the timing of the outcome. "Don't hold your breath," she said.

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On Tuesday, the computer giant strongly defended its tax practices at a hearing in the European Parliament in Brussels, claiming it has paid "every cent of tax" that is due in Ireland. Addressing members of the European Parliament's Special Committee on Tax Rulings, Apple's Cathy Kearney, vice-president for operations based in Cork, said the company's tax arrangements in Ireland did not involve State aid.

"We've paid every cent of tax that's due in Ireland. We don't feel that there has been State aid involved, and . . . we look forward to that outcome happening at the end of the day and being vindicated in that view," she said in response to a question from Irish MEP Brian Hayes. She said the Irish government shared the view of the company, which has been based in Ireland since 1980. Representatives from Apple, Google, Ikea and McDonald's were quizzed by MEPs at a special hearing of the European Parliament's special committee on tax on Tuesday afternoon in Brussels.

Asked about Apple’s tax structures in Ireland, Ms Kearney said Apple “does not operate a double-Irish structure”.

"We pay most of our taxes in the US. We pay tax in the local subsidiaries in full compliance with the tax law in those subsidiaries. We do not operate a double-Irish structure," she said. "We pay deferred tax income, and our income that is not taxed in Europe is subject to US tax."

Ireland is being investigated by the European Commission’s competition arm over tax rulings it offered to Apple in the 1980s, which the Commission believes may have been in breach of EU state-aid law.

Ms Kearney said Apple was in fact the “largest tax payer in the world”. She said the company had “long argued for tax reform” and favoured “simplicity over complexity”.

“Tax laws that are clear, certain and consistently applied encourage investment and job creation.”

Outlining how Apple founder Steve Jobs had chosen to establish a manufacturing and distributing centre in Co Cork in 1980, she said the company had remained firmly committed to Europe even when the company was undergoing difficult times in the 1990s.

“The certainty of laws and the quality of the work force attracted Apple to Europe,” she said. “We are proud of our contribution to jobs and economic growth throughout Europe.”

Suzanne Lynch

Suzanne Lynch

Suzanne Lynch, a former Irish Times journalist, was Washington correspondent and, before that, Europe correspondent