The complicated relationship between Ireland, Apple and the EU will be discussed between Irish Taoiseach Enda Kenny, TD, and Apple CEO Tim Cook when the duo meet in Cupertino today (1 December).
There won’t be too many times in history that a country leader will meet a foreign company, on foreign soil, to discuss tactics on how to stop the transfer of billions of euros of tax from one to the other. However, 2016 has been full of surprises.
Apple v EU
The Taoiseach is stopping off at Apple HQ today, as part of a three-day visit to Silicon Valley. The main topic of conversation, no doubt, will be the hefty tax bill that the tech giant owes Ireland, even though Kenny and his Government don’t want it.
In August, Europe’s competition commissioner, Margrethe Vestager, revealed the culmination of a three-year investigation into Apple’s tax status in Ireland.
Finding that Apple enjoyed a special agreement of sorts with the Irish Government, €13bn was the value Vestager put on the arrangement.
“This selective treatment allowed Apple to pay an effective corporate tax rate of 1pc on its European profits in 2003, down to 0.005pc in 2014,” she said.
Taoiseach Enda Kenny is asked if he has any concerns about the future of Apple in Ireland, given the European Commission ruling? pic.twitter.com/BSz2WtBhQN
— RTÉ News (@rtenews) December 1, 2016
Kenny said yesterday that his plans were to discuss Apple’s general relationship with Ireland, claiming Cook was “publicly and privately strongly in support” of the company’s operation in Ireland.
He said “we get on very well with Apple”, calling the company one of a “number of very large American companies” with a presence in Ireland. Though that is downplaying it, somewhat.
Apple’s position in Ireland is one of genuine importance, with a 5,000-strong workforce soon to be upped by 20pc, and major construction investments planned in Galway and Cork.
Last month, a crowd of 2,000 people marched in Athenry in support of plans for an €850m Apple data centre.
The investment by Apple in a state-of-the-art data centre in Athenry represents the single biggest digital infrastructure investment west of the Shannon and is a considerable economic prize for the region.
The data centre will manage data for Apple’s Music, App Store, Messages, Maps and Siri customer base. It will be 100pc powered by renewable energy.
It could forge the lynchpin for job creation by new, digital enterprises for decades to come.
At the time of the EU ruling, Cook called it “maddening” and “disappointing”. He said it was a political decision, with no basis in fact.
The Irish Government was very, very quick to row in behind the company. Minister for Finance, Michael Noonan, TD, almost immediately gave the State’s stance, even before a cabinet meeting to clarify views.
Then, one day before the deadline for an appeal of the decision, Noonan acted.
“The government fundamentally disagrees with the European Commission’s analysis and the decision left no choice but to take an appeal,” Noonan told a European Parliament committee in Brussels.
“The tax practices that gave rise to the Apple decision are no longer part of Irish law, but we still think that the competition commissioner is wrong in law, and we’re appealing on those grounds.”