Ireland's deputy Prime Minister Eamon Gilmore told that Irish tax regime should not be blamed for any loopholes in the international tax rules that have been used by Apple Inc. (NASDAQ:AAPL) to avoid taxes.
A US senate committee have blamed that Apple Inc. (NASDAQ:AAPL) used some of its Irish subsidiaries to avoid taxes at home as the subsidiaries were not designated as tax-resident anywhere in the world. Even one of the sources in the committee termed the subsidiaries as "iCompanies – 'I' for imaginary, invisible", reports Guardian.
Gilmore, who represents Irish Labour party and is also the countries minister for foreign affairs and trade told such issues have not cropped due to the Irish taxation system. On being asked about the panel report, the minister told national broadcaster RTE that the issues are concerned with taxation systems of other jurisdictions and those jurisdictions need to address the issues first.
The Irish minister made the statement from Brussels, where recently European parliament supported a proposal to combat tax fraud, evasion and havens.
The chairperson of European parliament's economic and monetary affairs committee, Sharon Bowles MEP, told “It is totally unacceptable that corporate tax avoidance is now the norm in Europe, aided and abetted by aggressive tax planning and tax consultancy firms.” The vote today in the European parliament backing extensive measures to curb tax evasion, “sends a strong signal” to Europe's Finance Ministers, that tax evasion is totally unacceptable and should be curbed “once and for all.” The EU summit is scheduled from tomorrow.
US panel report
As per a 40 page senate committee report, one of the important subsidiary of Apple Inc. (NASDAQ:AAPL) in Europe, which is responsible for all Apple's retail stores throughout Europe, has been avoiding taxes for the past five years.
As per the report by US senate panel, one of iPhone maker’s Irish subsidiaries located in Cork, received about $29.9bn (£19bn) in the form of dividends from lower-tiered offshore Apple Inc. (NASDAQ:AAPL) affiliates from 2009 to 2012. The dividends received by the Irish subsidiary amounted to Apple Inc. (NASDAQ:AAPL)'s 30 percent of the total worldwide net profits. The report asserts that Apple took advantage of the difference in tax rules of Ireland and US.
Apple Inc. (AAPL) denying
Apple Inc. (NASDAQ:AAPL) in its defense issued a statement online on Monday, saying it uses no “tax gimmicks". Cupertino based company said the Irish subsidiary, Apple Operations International, in no way reduces Apple tax liability in US and for 2013, and the company will pay more than $7bn in US taxes.
Apple is not the only organization that is exploiting low corporate tax laws overseas. Big US based firms like Google Inc (NASDAQ:GOOG) and Facebook Inc (NASDAQ:FB) have their European headquarters in Ireland for similar reasons. Presently, Ireland’s corporate tax rate is 12.5 percent.