1
00:00:00,040 --> 00:00:02,240
Speaker 1: Another big story today, just breaking in the last hour

2
00:00:02,320 --> 00:00:05,320
Speaker 1: or so, Apple facing a potential tax bill running into

3
00:00:05,360 --> 00:00:09,000
Speaker 1: billions of euros with the EU. The European Union poised

4
00:00:09,000 --> 00:00:11,319
Speaker 1: release of finding into its dealings in Ireland as soon

5
00:00:11,360 --> 00:00:14,880
Speaker 1: as Tuesday. Dared Doyle joins us, and now he is

6
00:00:15,480 --> 00:00:18,880
Speaker 1: one of the These are actually our Dublin bureau chief.

7
00:00:18,920 --> 00:00:20,760
Speaker 1: He's been writing a lot about what's going on with

8
00:00:20,800 --> 00:00:24,480
Speaker 1: Apple in this whole tax and version situation. Also, we're

9
00:00:24,560 --> 00:00:28,080
Speaker 1: joined by senior international national tax or reporter Kevin Bell

10
00:00:28,320 --> 00:00:32,680
Speaker 1: for Bloomberg News. So welcome, gentlemen, and Daryl, let's start

11
00:00:32,720 --> 00:00:35,400
Speaker 1: with you set the table for us of of what

12
00:00:35,840 --> 00:00:38,120
Speaker 1: what has been going on between Apple and the EU

13
00:00:38,360 --> 00:00:41,680
Speaker 1: and what's about to happen. Yes, this has been gone

14
00:00:41,680 --> 00:00:44,720
Speaker 1: back a couple of years where the European Commissioners were

15
00:00:44,720 --> 00:00:48,760
Speaker 1: looking into Apple tax arrangements in Ireland, and as far

16
00:00:48,760 --> 00:00:50,800
Speaker 1: back as two thousand and fourteen they gave us some

17
00:00:50,800 --> 00:00:54,080
Speaker 1: glimmery findings that they reckoned that Ireland had given essentially

18
00:00:54,080 --> 00:00:58,200
Speaker 1: given Apple some tax breaks in return for some jobs.

19
00:00:58,320 --> 00:01:01,320
Speaker 1: And what we've all been waiting for is the amount

20
00:01:01,480 --> 00:01:05,240
Speaker 1: of the arrears of Apple might pay. And that's kind

21
00:01:05,240 --> 00:01:07,800
Speaker 1: of a gathering page on speculations. It could be very little,

22
00:01:07,840 --> 00:01:10,600
Speaker 1: around a hundred million euros, but we've learned this evening

23
00:01:10,760 --> 00:01:14,520
Speaker 1: is that the arrears and will run into billions of euros.

24
00:01:14,520 --> 00:01:16,959
Speaker 1: We have made been any more specific than that, but

25
00:01:17,000 --> 00:01:19,160
Speaker 1: we're talking at big number here. I mean, like in

26
00:01:19,200 --> 00:01:21,480
Speaker 1: the context, I mean Apples sitting on about two h

27
00:01:21,760 --> 00:01:25,600
Speaker 1: billion euros of cash. So it's not short few dollars,

28
00:01:25,640 --> 00:01:28,640
Speaker 1: but still two billion or so and going to be

29
00:01:28,640 --> 00:01:30,759
Speaker 1: pretty for Apple if that's the way it turns out tomorrow.

30
00:01:31,440 --> 00:01:36,480
Speaker 1: So what what's at stake than for for Ireland and

31
00:01:36,560 --> 00:01:38,880
Speaker 1: for how this is going to play out in terms

32
00:01:39,040 --> 00:01:45,119
Speaker 1: of future cases, for future disputes. That's a good question.

33
00:01:45,240 --> 00:01:47,640
Speaker 1: Aren't in a very usual position? Apple is going to

34
00:01:47,680 --> 00:01:50,440
Speaker 1: actually have to pay this money to Ireland? Okay? But

35
00:01:50,520 --> 00:01:53,240
Speaker 1: Iren the saying we don't want this money. Okay, we

36
00:01:53,280 --> 00:01:55,280
Speaker 1: don't want your two billion, you keep your two billion.

37
00:01:55,680 --> 00:01:59,480
Speaker 1: The reason being is they're afraid of tarnishing their reputation.

38
00:01:59,520 --> 00:02:01,360
Speaker 1: The seas weeks in the US, and we've got a

39
00:02:01,440 --> 00:02:05,160
Speaker 1: number of companies here, Facebook, Google, Iron needs to show

40
00:02:05,200 --> 00:02:08,080
Speaker 1: the standing shoulder to show there will Apple on this issue,

41
00:02:08,400 --> 00:02:11,120
Speaker 1: because if it doesn't be a concern that US companies

42
00:02:11,120 --> 00:02:14,400
Speaker 1: to get nervous about Iron's commitments to the multinational sector

43
00:02:14,600 --> 00:02:17,920
Speaker 1: that's such an important part of our economy. So bizarre

44
00:02:18,000 --> 00:02:20,359
Speaker 1: situation in our government saying no, we don't want your

45
00:02:20,760 --> 00:02:23,280
Speaker 1: two three four billion that even though that could possibly

46
00:02:23,840 --> 00:02:28,200
Speaker 1: you know, by you know, more schools and more hospitals, etcetera, etcetera.

47
00:02:28,480 --> 00:02:30,720
Speaker 1: And the reason that is is a concern about tarnishing

48
00:02:30,800 --> 00:02:33,040
Speaker 1: or incloss reputation. So there's a lot of safe here

49
00:02:33,040 --> 00:02:35,920
Speaker 1: for Iron's Arn't has vowed to fight this all the

50
00:02:35,960 --> 00:02:38,200
Speaker 1: way to the final course in the European courts. Um.

51
00:02:38,600 --> 00:02:39,919
Speaker 1: So there's a long way to go to This could

52
00:02:39,919 --> 00:02:41,600
Speaker 1: be another five years and this before we see any

53
00:02:41,600 --> 00:02:43,679
Speaker 1: money coming to Ireland. And it's a long way to

54
00:02:43,720 --> 00:02:47,200
Speaker 1: go into one. All right, So Kevin, you jump in

55
00:02:47,280 --> 00:02:50,240
Speaker 1: with us, as I said, he's our senior international tax reporter,

56
00:02:50,400 --> 00:02:54,600
Speaker 1: Kevin Bell. So so what does the specific UH law

57
00:02:55,080 --> 00:02:58,519
Speaker 1: that is this whole tax this whole decision is hinging

58
00:02:58,560 --> 00:03:05,960
Speaker 1: on right now, High Catherine. Um. It revolves around transfer pricing. UH.

59
00:03:06,040 --> 00:03:10,680
Speaker 1: It's a very deep technical subject that involves accounting, tax

60
00:03:11,320 --> 00:03:16,200
Speaker 1: and economic rules, and for for decades, the o e

61
00:03:16,320 --> 00:03:19,520
Speaker 1: c D has has its own set of rules, the

62
00:03:19,520 --> 00:03:23,400
Speaker 1: o e c D Transfer Pricing guidelines. And then, as

63
00:03:23,440 --> 00:03:26,000
Speaker 1: a Dara has pointed out, a couple of years ago,

64
00:03:26,120 --> 00:03:30,840
Speaker 1: these the state aid cases started and the United States

65
00:03:30,880 --> 00:03:35,120
Speaker 1: would argue that, Um, the European Commission is coming up

66
00:03:35,120 --> 00:03:38,520
Speaker 1: with its own set of transfer pricing rules and it's

67
00:03:38,600 --> 00:03:42,280
Speaker 1: those rules that are playing in this case. So, Kevin,

68
00:03:42,400 --> 00:03:45,240
Speaker 1: have you ever heard anything like this is worth the

69
00:03:45,240 --> 00:03:47,320
Speaker 1: Irish government saying no, no, we don't want the money

70
00:03:47,440 --> 00:03:50,000
Speaker 1: we want to They don't want to antagonize all those

71
00:03:50,080 --> 00:03:52,000
Speaker 1: U S corporations that they want to keep doing business

72
00:03:52,040 --> 00:03:55,200
Speaker 1: in Ireland. Um. In the TACs world, it's a very

73
00:03:55,240 --> 00:03:59,880
Speaker 1: bizarre dynamic that. Um, you you have a government saying

74
00:04:00,520 --> 00:04:03,960
Speaker 1: I don't want tax revenue. But from Ireland's perspective, it's

75
00:04:04,080 --> 00:04:09,080
Speaker 1: very very understandable. UM. Ireland's tax regime has has been

76
00:04:09,120 --> 00:04:13,280
Speaker 1: a huge selling point to tow US companies. You only

77
00:04:13,320 --> 00:04:15,680
Speaker 1: have to be at double in airport to see the

78
00:04:15,760 --> 00:04:20,679
Speaker 1: US executives and computer folk. UM. So this this whole

79
00:04:20,720 --> 00:04:23,680
Speaker 1: situation that's been a real headache for the Irish government

80
00:04:24,160 --> 00:04:27,839
Speaker 1: and Dared Doyle, Um, like you've written a few different

81
00:04:27,880 --> 00:04:32,080
Speaker 1: stories touching on the possibility of an appeal, how would

82
00:04:32,080 --> 00:04:34,480
Speaker 1: that work. Well, first of all, think it's really important

83
00:04:34,520 --> 00:04:38,000
Speaker 1: to make a one point here. What's not on the

84
00:04:38,080 --> 00:04:40,799
Speaker 1: threat here is Ireland's corporate tax rate, which is twelve

85
00:04:40,839 --> 00:04:43,640
Speaker 1: point five percent. This case is not about our twelve

86
00:04:43,640 --> 00:04:45,680
Speaker 1: point five percent rate, which is really the key to

87
00:04:45,760 --> 00:04:49,000
Speaker 1: attracting companies like Google and Facebook LinkedIn to Ireland. It's

88
00:04:49,120 --> 00:04:51,800
Speaker 1: very important to remember that, as Kevin said, sort of

89
00:04:51,960 --> 00:04:54,680
Speaker 1: a dB technically as you hear about transfer pricing and

90
00:04:54,720 --> 00:04:58,080
Speaker 1: whilest deals done on the side, you know, with Apple

91
00:04:58,200 --> 00:05:00,520
Speaker 1: and Ireland to kind of let them pay left. But

92
00:05:00,800 --> 00:05:03,200
Speaker 1: very clearly what this isn't about the twelve point five

93
00:05:03,200 --> 00:05:06,000
Speaker 1: percent rate, which will which will remain the pillar of

94
00:05:06,040 --> 00:05:09,520
Speaker 1: Irish economic policy. That is very clear on that one.

95
00:05:09,600 --> 00:05:12,919
Speaker 1: So in fact, the implications of this case may not

96
00:05:13,040 --> 00:05:15,640
Speaker 1: be huge in that it doesn't seem like any other

97
00:05:15,720 --> 00:05:19,440
Speaker 1: US corporased operating Ireland are facing similar probe, at least

98
00:05:19,480 --> 00:05:21,960
Speaker 1: not that we know at this point. So you know,

99
00:05:22,000 --> 00:05:23,640
Speaker 1: there isn't that threat there. But in terms of the

100
00:05:23,680 --> 00:05:25,039
Speaker 1: appeal of what will happen, I mean it's in the

101
00:05:25,120 --> 00:05:27,240
Speaker 1: very start Ireland that will fight is all the way

102
00:05:27,240 --> 00:05:30,200
Speaker 1: to the court. They have employed very expensive lawyers in

103
00:05:30,240 --> 00:05:34,040
Speaker 1: London to begin the process that they've embracing for new

104
00:05:34,240 --> 00:05:36,840
Speaker 1: Rude the last two years. So what lit will disappearance

105
00:05:36,839 --> 00:05:38,640
Speaker 1: of the court could be five years or so. In

106
00:05:38,680 --> 00:05:41,400
Speaker 1: the meantime, Apple will pay the money to Ireland. I

107
00:05:41,400 --> 00:05:43,640
Speaker 1: don't will keep it in a special ring fenced account

108
00:05:44,080 --> 00:05:47,080
Speaker 1: and they won't said they won't spend they won't spend

109
00:05:47,080 --> 00:05:49,599
Speaker 1: that money. What's interesting now is that people aren't up

110
00:05:49,600 --> 00:05:51,839
Speaker 1: beginning to say, but hold on, you guys want to

111
00:05:52,320 --> 00:05:56,159
Speaker 1: us don't want this money. This money could buy as hospital, schools,

112
00:05:56,160 --> 00:05:58,280
Speaker 1: et cetera. And so it's litical pressure is beginning to

113
00:05:58,279 --> 00:06:00,480
Speaker 1: build a little bit. You know. Now people are focusing

114
00:06:00,480 --> 00:06:02,880
Speaker 1: on the routing. We're gonna connect tomorrow and say, hump,

115
00:06:02,920 --> 00:06:05,320
Speaker 1: let's just make any sense take you know's gonna take

116
00:06:05,320 --> 00:06:07,120
Speaker 1: this calash So it's gonna be very interested. Dynamic's my

117
00:06:07,120 --> 00:06:09,800
Speaker 1: point of view. Fascinating. Der Doyle laying out the story

118
00:06:09,839 --> 00:06:13,200
Speaker 1: with his bureau chief in Dublin for Bloomberg News as

119
00:06:13,240 --> 00:06:17,440
Speaker 1: well as our senior international tax reporter, Kevin Bell. I'm

120
00:06:17,520 --> 00:06:19,800
Speaker 1: Kathleen Hayes. This is Bloomberg