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Apple controversy lays bare complex Irish tax web

Reuters/ AFR | July 15, 2013
Companies, investors and some lawmakers argue it is a firm's duty to keep its tax bill as low as possible so it can invest to grow and return money to shareholders.

It was not clear to what extent companies' Irish units contributed to reducing their tax bills.

Companies can opt to declare only "significant subsidiaries" to the SEC, and some have names unrelated to their parent, making it hard to pin down exactly which ones have an Irish presence.

The 14 members of the S&P 500 that have 10 or more companies incorporated in Ireland have between 77 and, in the case of Pfizer, 655 declared subsidiaries worldwide.

More than half of those companies employ 600 or more people across Ireland. Stanley Black & Decker, which has a tax office in Dublin and a services centre in Cork, employs 58 people at its 15 Irish-registered subsidiaries.

It did not return requests for comment.

Irish lawmakers are reluctant to dig any deeper. They opted earlier this month not to interview multinational firms at tax hearings, a move critics said was protecting companies that don't pay their fair share of tax.

"I think politicians are afraid of the multinationals, said Pearse Doherty of the left-wing Sinn Fein opposition party, who led calls for multinational bosses to face parliamentary grillings similar to those in the United States and Britain.

"They're afraid ... that they will pull out of Ireland. It seems as if they are on bended knee. It reminds me of the Celtic Tiger era when the bankers ruled the roost."

With the country's unemployment rate just under 14 per cent, almost three times where it stood five years ago, such concerns are understandable. About 700 US firms account for 115,000 of the 1.8 million Irish residents who have hung onto their jobs.

Big job announcements from Apple, Eli Lilly and Co and eBay's Paypal have helped offset the worst of the jobs crisis, with public service numbers still falling and Ireland's stricken banks still laying off staff.

The positive impact of international companies can be seen in the once derelict area of Dublin's docklands, now dubbed Silicon Docks, where Google and Facebook's offices sit next to the country's largest theatre, newest five-star hotel and modern apartment blocks.

Ireland's government insists its tax rate is transparent and other countries are to blame if the tax paid by companies like Apple is too low. The finance minister said Ireland would not become the US Senate's 'whipping boy' on tax.

"Ireland is not some kind of 'get-rich-quick' scheme for Americans," Peter Keegan, president of the American Chamber of Commerce Ireland told its annual Independence Day lunch.

Keegan, who is the head of Bank of America Merrill Lynch in Ireland, described the recent criticism as being based on "vague accusations" and "a poor understanding of global commerce".


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