|Apple held $158bn in cash/near cash in Dec 2014 compared with $13bn in 2008. Most of the cash is in US bank accounts even though it's classified as being overseas.
Ireland: Last November Michael Noonan, finance minister, predicted that the European Commission would drop its state aid case in respect of an agreement on a special Irish tax arrangements for Apple Inc. but the Department of Finance is now preparing for a case before the European Court of Justice.
“My legal advice is that the Irish authorities will win the case quite legally and there isn’t a very strong case by the commission,” Noonan said to reporters after a finance ministers’ meeting in Brussels. “It’s more likely that that investigation will be dropped than there will be further investigations.”
The Irish Times reports Tuesday that the Government has hired one of the most senior tax barristers in the UK to spearhead its defence in relation to the European Commission’s ongoing state aid investigation into the corporate tax arrangements in this country for Apple.
It said that the Department of Finance confirmed yesterday it had hired Philip Baker QC, who specialises in taking corporation tax cases to the European Court of Justice (ECJ).
Claims that the commission hasn't a strong case may well be bluster or hinge on what state aid really means while taking a case to the ECJ may well be motivated to show Apple that the Government is doing its best to ensure that the arrangements are confirmed as being legal.
The commission last September published an outline of its case which saved €850m in Irish tax between 2004 and 2008 — the second Irish tax ruling was issued in 2007 after Apple decided that its Irish offshore companies were stateless meaning that they were not tax resident anywhere.
Apple had a foreign tax rate of under 2% on the profits from about 60% of its revenues in fiscal 2012 and it could have minimised its tax liability by using shell companies registered elsewhere but the advantage of the Irish ones was that they appeared to be typical Irish onshore companies trading from its campus in Cork.
Apple's principal Irish company became stateless for tax purposes from 2006
European Commission: Apple given special tax deals by Ireland
Apple's foreign tax rate tumbled after 2007 Irish 'advanced opinion'
Apple says it may have to pay Ireland back tax; Foreign tax rate at 4.4%
Mark Paul of The Irish Times writes today that Peter Baker told the Journal of International Taxation that the OECD moves to prevent multinationals shifting profits between countries would affect the patent box regimes, and proposed regimes, of four countries including Ireland.
“[The UK, Ireland, Switzerland and Luxembourg] will have to change their patent box regimes so that there is a clear nexus between the tax reduction and the research and development carried out by the company. This will require a substantial reduction in the scope of patent box regimes,” he was quoted as saying.
Finfacts has highlighted since last October's budget that 1) companies do not do a significant research in Ireland and 2) that apart from the OECD's BEPS tax project, that the European Commission was working on its own proposals for patent boxes.
Replacing the Double Irish with Knowledge Development / Patent Box - Part 2
Germany and UK agree to restrict 'patent box' tax incentives to local R&D