Apple says it has paid all it owes in tax in Ireland

Technology giant Apple has strongly defended its tax practices at a hearing in the European Parliament in Brussels, claiming it has paid "every cent of tax" that is due in Ireland.

Addressing members of the European Parliament's Special Committee on Tax Rulings, Apple's Cathy Kearney, vice-president for operations based in Cork, said that the company's tax arrangements in Ireland did not involve state aid.

"We've paid every cent of tax that's due in Ireland. We don't feel that there has been state aid involved, and ..we look forward to that outcome happening at the end of the day and being vindicated in that view," she said in response to a question from Irish MEP Brian Hayes. She said that the Irish government shared the view of the company, which has been based in Ireland since 1980.

Representatives from Apple, Google, IKEA and McDonalds were quizzed by MEPs at a special hearing of the European Parliament's special committee on tax on Tuesday afternoon in Brussels.

Asked about Apple’s tax structures in Ireland, Ms Kearney said that Apple “does not operate a double Irish structure.”

“We pay most of our taxes in the US. We pay tax in the local subsidiaries in full compliance with the tax law in those subsidiaries. We do not operate a double Irish structure,” she said.

“We pay deferred tax income, and our income that is not taxed in Europe is subject to US tax.”

Ireland is being investigated by the European Commission’s competition arm over tax rulings it offered to Apple in the 1980s, which the Commission believes may have been in breach of EU state aid law.

Ms Kearney said that Apple was in fact the “largest tax payer in the world.”

She said that the company had “long argued for tax reform,” and favoured “simplicity over complexity.”“Tax laws that are clear, certain and consistently applied encourage investment and job creation.”

Outlining how Apple founder Steve Jobs had chosen to establish a manufacturing and distributing centre in County Cork in 1980, she said the company had remained firmly committed to Europe even when the company was undergoing difficult times in the 1990s.

“The certainty of laws and the quality of the work force attracted Apple to Europe 36 years ago,” she said. “We are proud of our contribution to jobs and economic growth throughout Europe “

Under questioning by MEPs Google's head of economic policy for Europe, Middle East and Africa (EMEA) Adam Cohen said that Google had paid an average of 19 per cent corporate tax over the last five years and employed more than 14,000 people throughout the European Union.

He said that while there was a debate about whether tax rules are fit for purpose, Google complied with all rules. Calling for “clear rules of the road” on taxation and wider international coordination, he warned that a patchwork of legal changes could increase uncertainty, increasing the risk of double taxation.

Google has come under strong criticism for a £130 million tax settlement with British revenue authorities earlier this year, which many criticised as being too low.

The European Parliament’s so-called “TAXE 2” special committee on tax is a follow-up to the Special committee on tax which was established in the wake of the Luxembourg Leaks scandal.