Apple pays all its taxes and is committed to Ireland, iPhone maker tells Europe

16 Mar 2016

Cathy Kearney, country manager of Apple Ireland, pictured as she was honoured at the UCC Alumni Achievement Awards last year. Photo via Provision Photography

Apple has paid every cent of tax that is due in Ireland and is proud of its contribution to economic growth in Europe, the country’s VP of European Operations Cathy Kearney said in response to questions at the European Parliament in Brussels yesterday.

Kearney was in the European Parliament yesterday (16 March) where she appeared on a panel alongside representatives of Google, McDonalds and Ikea on the issue of tax.

Kearney, who heads up Apple’s operations in Cork, said that the company is not getting unfair state aid and remains “committed to Ireland” whatever the outcome of the European Commission’s case against the iPhone maker.

“We feel that we’ve paid every cent of tax that’s due in Ireland. We don’t feel that there has been state aid involved, and I suppose we look forward to that outcome happening at the end of the day and being vindicated in that view,” Kearney said.

‘We are proud of our contribution to jobs and economic growth throughout Europe’

Apple located its first overseas operations in Cork in 1980 when the company was still pretty much in start-up mode.

Today, the company employs 5,000 people in a variety of administration, supply chain, e-commerce and manufacturing roles in Cork. In October, CEO Tim Cook announced that a further 1,000 people are to be employed at Apple in Cork, bringing its workforce to 6,000 people in the next year-and-a-half.

Kearney said that co-founder Steve Jobs selected Cork as a manufacturing and distribution centre based on the quality of the people and she said the company remained committed to Europe even when it was experiencing difficult times in the late 1990s.

“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.”

Apple is the world’s largest taxpayer

Kearney said that Apple is the world’s largest taxpayer, paying $13.2bn – a rate of 26.5pc – on its profits worldwide last year.

According to The Irish Times, she said that Apple has long argued for tax reform, preferring simplicity over complexity.

“Tax laws that are clear, certain and consistently applied encourage investment and job creation.

“The certainty of laws and the quality of the workforce attracted Apple to Europe.

“We are proud of our contribution to jobs and economic growth throughout Europe,” Kearney told the European Parliament panel.

In 2014, an economic impact study produced on behalf of Apple estimated that Apple has contributed 629,000 jobs in Europe from app developers and suppliers to business processes and retail. It also pointed out that 50pc of all direct and indirect app economy jobs in the EU’s 28 member states can be directly attributed to iOS.

Either way, Apple and other multinational companies such as Amazon are under the scrutiny of the European Commission based on allegations these companies received unfair tax treatment in countries like Ireland and Luxembourg.

The European Commission has already ordered The Netherlands and Luxembourg to recover $30m in back taxes from Starbucks and Fiat Chrysler.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years