BRUSSELS/LONDON: The European Union has accused Ireland of swerving international tax rules by letting Apple shelter profits worth tens of billions of dollars from revenue collectors in return for maintaining jobs.
European Competition Commissioner Joaquin Almunia told the Dublin government in a letter published yesterday that tax deals agreed in 1991 and 2007 amounted to state aid and may have broken EU laws.
“The Commission is of the opinion that through those rulings the Irish authorities confer an advantage on Apple,” Almunia wrote in the letter, which was dated June 11. Apple said it had received no selective treatment.
“We’re subject to the same tax laws as the countless other companies who do business in Ireland,” a spokesman said.
An Irish government spokesman referred to previous statements saying it followed EU rules. When publication of the letter was flagged on Monday the Irish finance department said it was confident it had not breached state aid rules and had responded to the Commission to address “concerns and misunderstandings.”
The Commission said the tax rulings were “reverse engineered” to ensure that Apple had a minimal Irish bill, adding that minutes from meetings involving Irish officials showed that the Irish tax authority did not even attempt to apply international tax rules in its deals with Apple.
Instead, the company’s tax treatment had been “motivated by employment considerations”, the Commission said, citing the minutes of meetings between Apple representatives and Irish tax officials. An Apple spokesman referred to previous statements where the company denied seeking any “quid pro quo” from Dublin. The company employs 4,000 people at a manufacturing plant in Cork, south-west Ireland, its only such facility outside US.
Apple, along with other multinationals, has found its arrangements scrutinised in recent years as corporate tax avoidance rose to the top of the political agenda in the United States and Europe.
Widespread profit shifting by tech giants was referred to by Britain’s Finance Minister George Osborne on Monday as one of the problems his government would create new measures to tackle, and the G20 group of leading economies has also asked the OECD to review international tax rules.
The EU is also investigating tax deals between coffee chain Starbucks Corp and the Netherlands and Luxembourg tax rulings received by a subsidiary of automotive group Fiat. Reuters
