Google and Apple will not have to testify about tax payments in Ireland. The Irish parliament has rejected a motion to allow a Subcommittee on Global Taxation to call representatives from both companies to testify.
The motion to question Google and Apple executives was placed in front of the Irish Parliament by a member of the Joint Committee on Finance, Public Expenditure, and Reform.
Apple and Google were highlighted by the Subcommittee as it tries to determine how foreign companies are exploiting Irish tax laws to avoid paying fair taxes.
Following the Irish Parliament’s vote, Doherty revealed:
“Given the fact that multinational corporations have appeared at committees in Britain and the United States to give evidence about their tax affairs in Ireland, it is ridiculous that politicians here in Ireland would vote down a proposal for them to do the same here. If the committee is to do its job properly it is important that it is free to invite the relevant people and companies to provide all the relevant information.”
Under Irish law, companies managed and controlled in the country are tax-resident. Apple uses the country to pass through international revenues through a subsidiary called Apple Operations International, which is managed, but not controlled, in Ireland.
US tax laws in comparison are based on where a company is incorporated, thus creating a loophole which allows Apple to dodge paying a significant share of its owed taxes.
Apple Inc. uses three offshore businesses to reduct its effective tax rate to 15 percent. Apple, in comparison, would pay 35 percent taxes in the US.
The loophole being examined is known as a “Double Irish” since it requires two businesses to exist. The first business holds intellectual property rights and the second to license those rights to keep profits low. The second company receives a low tax rate of just 12.5 percent.
Apple, Google, and various other tech companies have been called out in the United States