Cantillon: Deal or no deal? That is not the question

The controversy over whether Apple got a deal from the Government back when it arrived here is one of those media stories that looks less like a revelation the closer you look at it.

This is because the accounts for the main Irish-incorporated Apple company were published up to the mid-noughties and the tax rate being paid on its profits was there for anyone to see – had they looked.

The accounts for Cork-based Apple Computer Inc Ltd (now Apple Sales International) and subsidiaries for 2004 show the group paid $20.7 million (€16 million) tax on profits of $345 million or 6 per cent. The accounts for 1990 show the group paid tax of $17 million on profits of $422 million, which is 4 per cent. For 1993, the rate was 2 per cent.

The low tax rates are believed to be a factor of the proportion of the annual profits that are taxable in Ireland under current Irish and US tax law. It seems the company trades in Apple products around the non-US world so that the profits from the trade in those parts of the globe ends up back in Cork, without the products traded necessarily ever doing so.

As almost everyone knows by now, Ireland doesn’t tax companies that are managed and controlled from outside Ireland, and the US doesn’t tax companies that are incorporated outside the US, so the Apple company, controlled as it is from the US, falls between two tax stools.

Given Apple's size there is no doubt
but that the tax authorities in the US and here are well aware of exactly how it has been managing its affairs over past decades.

The US political system, therefore, was always in a position to take note of what was going on, and change the law there, if it wanted to collect more tax from the computer, phone and iPad maker.

Seen in that light, the outrage of Democratic senator Carl Levin, who heads up Washington's Permanent Subcommittee on Investigations, can appear a bit odd.

Not that having one of the richest and most profitable companies in the world being non-tax resident anywhere on the globe does not justify outrage.

The question though is at whom?