Many people have been following the Senate Permanent Subcomittee on Investigations’ inquiries into Apple’s international tax structure over the past few weeks, especially after the Senators focused their attention to Apple’s use of Irish holding companies.
The Irish Ambassador to the United States, Michael Collins, in reaction to the increased focus on his country, denied that his country is a tax haven, that it imposes a strict 12.5 percent tax on trading income and said there was no possibility for individual tax rates being negotiated for companies.
Apparently the Irishman’s letter fell short for Senators McCain and Levin. The two Senators reacted by stating that Apple executives corroborated that Apple had a special arrangement with the Irish government, leading to an effective tax rate of only two percent, and in some cases even less.
The Senators concluded that “[m]ost reasonable people would agree that negotiating special tax arrangements that allow companies to pay little or no income tax meets the common-sense definition of a tax haven.”
Surely not the effect Mr. Collins hoped his letter to the Americans would have.
By Ruben Conitzer
