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FactCheck: Is Apple really the "largest taxpayer in Ireland"?

The company’s CEO Tim Cook made the claim this week, and Michael Noonan repeated it. We checked it out.

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AMID THE WAVE of news coverage this week on the European Commission’s ruling that Ireland must recover €13 billion in back taxes from Apple, one big claim stood out.

The US tech giant’s CEO, Tim Cook, said Apple was “the largest taxpayer in Ireland”.

And on Tuesday’s RTE Six One News, Finance Minister Michael Noonan repeated the claim, attributing it to an “Apple spokesperson”.

Is it true?

(Remember, if you hear a major claim on a big issue, email factcheck@thejournal.ie or tweet @TJ_FactCheck).

Claim: Apple is the largest taxpayer in Ireland
Verdict: UNPROVEN

What was said:

In a lengthy statement responding to the EC’s ruling on Tuesday, Apple CEO Tim Cook said:

As our business has grown over the years, we have become the largest taxpayer in Ireland, the largest taxpayer in the United States, and the largest taxpayer in the world.

We’ll be taking a look at the claim only as it relates to Ireland.

On Tuesday’s Six One News, Bryan Dobson put it to Michael Noonan that Apple had paid 0.005% tax on its profits in 2014, and asked “Is that defensible?”

In response, Michael Noonan repeated Cook’s claim, saying:

Margrethe [European Competition Commissioner Margrethe Vestager] is giving the international figure. You heard the Apple spokesman saying they’re the biggest taxpayer in Ireland, the biggest taxpayer in the US, and the biggest taxpayer worldwide.

The Facts

India Apple Source: Richard Drew/PA Images

It’s unclear what Cook was referring to in his claim, whether he included income tax alone, or added the PAYE contributions of Apple employees as well, or some other measure.

This week, FactCheck sent emails and left several voice messages for Apple’s PR team, asking for evidence and sources to support the claim. We did not receive a response of any kind.

We asked Revenue for information on the companies paying the largest amounts in tax in Ireland over the last few years.

They told us that under Section 815A of the 1997 Taxes Consolidation Act, they are “legally precluded from commenting on any taxpayer’s case, be the taxpayer an individual, corporate body, partnership or other entity”.

We also asked them whether anyone from Revenue had ever formally or informally given information to Apple which would reasonably lead to the conclusion that they were “the largest taxpayer in Ireland”.

Revenue said: “Interactions between Revenue and individual taxpayers are subject to the taxpayer confidentiality provisions of Section 851A”.

We asked the Department of Finance for the same information, and they told us:

Neither the Department of Finance nor the Revenue Commissioners can reveal confidential taxpayer information to the public or to other taxpayers.

This suggests, but does not explicitly state, that Apple CEO Tim Cook did not base his claim on information given to him by the department.

FactCheck also asked the Department of Finance why Minister Noonan had repeated Cook’s claim on Six-One News, and whether he was endorsing the veracity of the claim that Apple is Ireland’s biggest taxpayer.

A spokesperson told us: “The Minister said that essentially the company have volunteered that they are the biggest taxpayer in Ireland”.

However, the context of Noonan’s repetition of the claim (he was responding to Commissioner Vestager’s argument that Apple paid a miniscule percentage of tax on its profits in 2014) strongly suggests he was repeating a claim he believed to be true.

Nonetheless, neither his department, Revenue, or Apple provided any evidence whatsoever to support or refute the claim that Apple is the “largest taxpayer in Ireland”.

So the claim is so far UNPROVEN.

Is it possible?

Yes – clearly it is at least logically possible that Apple is Ireland’s largest taxpayer.

Is it plausible?

11/5/2016. Silicon Valley Announcements Source: Sam Boal

Tim Cook got a bit more specific in his claim during his interview on RTE Radio One’s Morning Ireland on Wednesday, saying:

In that year [2014], we paid $400 million to Ireland, and that amount of money was based on the statutory Irish income tax rate of 12.5%.

Let’s assume that’s true. Apple provided us no evidence, and clearly the company’s actual level of tax payment is hotly disputed, with the European Commission finding the company paid an “effective corporate tax rate” of 0.005% in 2014, the year Cook refers to.

The firm’s subsidiaries in Ireland – Apple Sales International and Apple Operations International – are unlimited companies, meaning they are not obliged to publish annual accounts.

Similarly, hard data from other companies can be somewhat sketchy, so we can’t draw any definitive conclusions.

However, data gathered by the Irish Times for their Top 1000 companies list shows the firms that paid the most tax in 2015 were Medtronic (€712 million, although not all of that may have been paid in Ireland) and AIB (€534 million).

A figure of $400 million (€330 million based on the 1 January 2015 exchange rate) would be significantly lower than that.

However, we’re talking about two different years. In 2015, the company with the biggest turnover in Ireland was CRH. In 2014, CRH reported paying €177 million in income tax.

So while we can’t say definitively either way, it is certainly plausible that Apple may currently pay the most income tax of any company in Ireland.

Conclusion

Apple did not provide any evidence to either clarify or support Tim Cook’s claim. Although Michael Noonan repeated the claim earlier this week, the Department of Finance didn’t provide any evidence either.

Later in the week, Tim Cook claimed Apple paid the equivalent of €330 million in tax in Ireland in 2014. A figure in that range makes it plausible, though far from certain, that Apple could pay the most income tax of any company in Ireland.

However, the claim remains UNPROVEN.

Send your FactCheck requests to factcheck@thejournal.ie

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About the author:

Dan MacGuill

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