Yesterday, technology mega corp. Apple issued a statement denying that they allegedly passed profits through their Irish subsidiary to avoid paying taxes on €1 billion of profits to Italian tax authorities.
According to prosecutors in Milan, the company neglected to declare just over €1 billion of profits for tax over the last three years. They are said to have purposely passed these profits through their Irish subsidiary to avail of Ireland's 12.5% tax rate and protect their profits. However despite the already low corporate tax rate, it is suspected that Apple, and other technology companies, pay a meagre tax rate of 2% or less due to loopholes and double taxation treaties in the Irish tax code.
Hitting back at the accusations, an Apple spokesperson declared to various Irish news sources that ‘Apple pays every dollar and euro it owes in taxes and we are continuously audited by the governments around the world.’
Despite this, a recent US Senate investigation revealed that the vast majority of Apples non-US profits are filtered through Ireland, meaning the company is not charged the resident tax rate in the country where it conducts business, allowing them to evade a higher tax rate.
Finance minister Micheal Noonan has already attempted to tackle a loophole which allowed companies to complete avoid paying tax by shifting their profits out of Ireland to low and zero tax jurisdictions such as Bermuda. He has further committed to closing all taxation loopholes by January 2015 affirming that Ireland wants to be ‘part of the solution… not part of the problem.’
The issue first came to light earlier in the year when US Senator criticised Ireland’s low corporation tax rate, branding it a ‘tax haven’ which has since prompted investigations by the EU into other countries corporation taxes and so called ‘sweetheart’ deals with international companies.