Ireland's finance committee has decided against questioning Apple about its tax practices in the country despite a similar inquiry recently held in the United States. The parliament's decision extends beyond questioning Apple to include other large multi-national companies, too.
Ireland drops plans to question multinational company tax practices
Instead, the finance committee will look into how Ireland's business tax policies fit into the world economy, according to The Guardian. While experts will be asked to testify, no business leaders will be included in the questioning.
Apple was called before an ongoing U.S. Senate investigation into corporate tax practices in May where CEO Tim Cook defended his company's actions by stating,
We don't move intellectual property offshore and use it to sell products back into the U.S. to avoid U.S. taxes. We don't stash money on some Caribbean island. We don't borrow money from our foreign subsidiaries to fund our U.S. business in order to skirt the repatriation tax.
Law makers have been looking into ways to boost tax revenue, and specifically into the ways that companies minimize their tax liability. Ireland's involvement in the tax game was a point of interest, too, since the country makes it easy for companies to not hand over nearly as much cash to the government. U.S. officials even went so far as to suggest Apple is using Ireland as a tax shelter.
Ireland's business tax laws are an incentive that draws companies into the country, which in turn helps boost the local economy. Changing those laws could cause some companies to leave and would also make Ireland less competitive in the world wide corporate market, and that means the country doesn't have much incentive to rework its tax policies.
The finance committee's decision to not question corporations may make businesses happy, but some people in Ireland aren't pleased. Pearse Doherty, the Sinn Fein finance spokesman, accused the government of pandering to multi-national companies that aren't paying taxes in the country, adding,
How can we look anybody in the eye out there and defend the type of austerity measures that this government is introducing when we're unwilling to take companies in [before parliament] who are not paying their fair share in this state?
Apple insists it isn't using other countries to shelter money from taxes and Mr. Cook said that he would like to bring more of the company's foreign revenue into the United States, but that curernt tax laws don't make that feasible. Instead, he sees U.S. tax reform as the solution. By cutting out the stiff financial penalties companies pay when bringing money into the U.S., more corporate money would come back into the States.
For its part, Ireland's law makers don't seem that interested in changing their tax policies, and that means companies that already take advantage of the country's system won't be changing their business plans any time soon.