Apple, Google Excused from Irish Tax Questioning
July 5, 2013 4:37 PM
There will be an inquiry into how Ireland uses the "global tax architecture," but the questioning will no longer require the presence of company executives
Apple and Google are off the hook when it comes to an investigation into how they
use the Irish tax system
Apple, Google and other multinational companies were originally called to talk about their tax setups in Ireland; as such arrangements had come under fire recently. The companies were accused of dodging taxes in other countries by a special route through Ireland.
However, Ciaran Lynch, chairman of the Irish parliament's finance committee, has cleared company executives from Apple and Google from having to explain their tax situations with Ireland. According to Lynch, there's no need for Ireland to have a tax investigation when the U.S.'s Senate subcommittee and the UK's public accounts committee are doing the same already.
"If there has been suggestions that companies have been 'off side' on tax, then the right people to go are those who make the rules," said Lynch. "You don't go to Manchester United or Chelsea when they're accused of being offside – you go to the referee, or to Fifa or Uefa."
Lynch will, however, have an inquiry into how Ireland uses the "global tax architecture," but the questioning will no longer require the presence of company executives.
In April 2012,
The New York Times
accused Apple of dodging millions of dollars
in taxes in California and 20 other U.S. states (and dodging billions of dollars in
) by routing its money through other locations. Even though Apple is based in Cupertino, California, it put an office in Reno, Nevada which allows Apple to escape California's 8.84 percent tax rate for Nevada's 0 percent. Apple has also sold digital content from low-tax countries anywhere around the world, and has used the "Double Irish With a Dutch Sandwich," which allows Apple to cut taxes by directing profits through low-cost Irish subsidiaries, the Netherlands and the Caribbean.
In May of this year, Apple CEO Tim Cook was called to appear before Congress to offer tax proposals. More specifically, he presented proposals that discuss companies bringing back foreign earnings to the United States. Furthermore, he suggested that this money be invested in research and development and creating jobs in the U.S.
Apple had come under fire for dodging heavy tax payments by profit shifting. For example, Apple made an estimated £6B ($9.50B USD) in Britain last year, but
paid only £10M ($15.8M USD) in taxes
. It was able to do this because of the British tax code's rule that largely exempts companies based in Ireland from paying British taxes.
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