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Apple has operated almost tax-free in Ireland since 1980, welcomed by a
government keen to bring jobs to what was then one of Europe's poorest
countries, former company executives and Irish officials have said, according to
The Finfacts analysis of the evolution of corporate taxes is that a tax
exemption on export profits was introduced in 1956; a 10% tax on manufacturing -
broadly defined: it included growing mushrooms under glass - was introduced in
1981 as some companies were due to see their 1956 exemption expire.
The lower rate was applicable, whether or not the goods were exported and the
Export Sales Relief Schemes, which Apple used, were completely terminated on 5th
Intel, the chip giant, for example began on a 10% rate in the early 1990s and
the agreement between the Irish Government and European Commission in 1997 was
to introduce one rate of 12.5% replacing the
general corporate tax rate and the two schemes as outlined above.
The 10% preferential corporation tax rate expired for firms that had
availed of it prior to 1998, in 2010.
The tax holiday that Apple was entitled to when it opened its plant in Cork in
1980, had ten years to run.
So when Apple executives told staff of the US Senate Permanent Investigations
Subcommittee that the company had negotiated a special deal with the Irish
government in the early 1990s to keep its tax ceiling at a rate of 2%, it fits
in with the timeline of the operative tax schemes.
The current Irish government denies that Apple got a special deal involving a
ceiling of 2% on the rate but it does not deny that Apple had got a special deal.
says that in 1990, Apple's tax holiday came to an end, and in that year, the
Irish operation's tax rate hit 4%, accounts from the period show.
In 1992, the company announced plans to cut hundreds of jobs after deciding to
move some work to Singapore, which at this time was attracting increasing
investment by offering tax holidays.
So when Phillip Bullock, Apple's head of tax
operations, told the Senate panel that the company had a special deal, why
would he lie to the investigators? As to how the tax liability would be kept low
if there wasn't special rate, is not known.