WEBVTT - Bloomberg's Doyle, BNA's Bell, on Apple's Irish Tax Bill(Audio)

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<v Speaker 1>Another big story today, just breaking in the last hour

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<v Speaker 1>or so, Apple facing a potential tax bill running into

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<v Speaker 1>billions of euros with the EU. The European Union poised

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<v Speaker 1>release of finding into its dealings in Ireland as soon

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<v Speaker 1>as Tuesday. Dared Doyle joins us, and now he is

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<v Speaker 1>one of the These are actually our Dublin bureau chief.

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<v Speaker 1>He's been writing a lot about what's going on with

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<v Speaker 1>Apple in this whole tax and version situation. Also, we're

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<v Speaker 1>joined by senior international national tax or reporter Kevin Bell

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<v Speaker 1>for Bloomberg News. So welcome, gentlemen, and Daryl, let's start

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<v Speaker 1>with you set the table for us of of what

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<v Speaker 1>what has been going on between Apple and the EU

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<v Speaker 1>and what's about to happen. Yes, this has been gone

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<v Speaker 1>back a couple of years where the European Commissioners were

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<v Speaker 1>looking into Apple tax arrangements in Ireland, and as far

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<v Speaker 1>back as two thousand and fourteen they gave us some

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<v Speaker 1>glimmery findings that they reckoned that Ireland had given essentially

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<v Speaker 1>given Apple some tax breaks in return for some jobs.

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<v Speaker 1>And what we've all been waiting for is the amount

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<v Speaker 1>of the arrears of Apple might pay. And that's kind

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<v Speaker 1>of a gathering page on speculations. It could be very little,

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<v Speaker 1>around a hundred million euros, but we've learned this evening

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<v Speaker 1>is that the arrears and will run into billions of euros.

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<v Speaker 1>We have made been any more specific than that, but

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<v Speaker 1>we're talking at big number here. I mean, like in

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<v Speaker 1>the context, I mean Apples sitting on about two h

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<v Speaker 1>billion euros of cash. So it's not short few dollars,

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<v Speaker 1>but still two billion or so and going to be

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<v Speaker 1>pretty for Apple if that's the way it turns out tomorrow.

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<v Speaker 1>So what what's at stake than for for Ireland and

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<v Speaker 1>for how this is going to play out in terms

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<v Speaker 1>of future cases, for future disputes. That's a good question.

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<v Speaker 1>Aren't in a very usual position? Apple is going to

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<v Speaker 1>actually have to pay this money to Ireland? Okay? But

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<v Speaker 1>Iren the saying we don't want this money. Okay, we

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<v Speaker 1>don't want your two billion, you keep your two billion.

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<v Speaker 1>The reason being is they're afraid of tarnishing their reputation.

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<v Speaker 1>The seas weeks in the US, and we've got a

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<v Speaker 1>number of companies here, Facebook, Google, Iron needs to show

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<v Speaker 1>the standing shoulder to show there will Apple on this issue,

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<v Speaker 1>because if it doesn't be a concern that US companies

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<v Speaker 1>to get nervous about Iron's commitments to the multinational sector

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<v Speaker 1>that's such an important part of our economy. So bizarre

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<v Speaker 1>situation in our government saying no, we don't want your

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<v Speaker 1>two three four billion that even though that could possibly

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<v Speaker 1>you know, by you know, more schools and more hospitals, etcetera, etcetera.

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<v Speaker 1>And the reason that is is a concern about tarnishing

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<v Speaker 1>or incloss reputation. So there's a lot of safe here

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<v Speaker 1>for Iron's Arn't has vowed to fight this all the

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<v Speaker 1>way to the final course in the European courts. Um.

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<v Speaker 1>So there's a long way to go to This could

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<v Speaker 1>be another five years and this before we see any

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<v Speaker 1>money coming to Ireland. And it's a long way to

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<v Speaker 1>go into one. All right, So Kevin, you jump in

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<v Speaker 1>with us, as I said, he's our senior international tax reporter,

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<v Speaker 1>Kevin Bell. So so what does the specific UH law

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<v Speaker 1>that is this whole tax this whole decision is hinging

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<v Speaker 1>on right now, High Catherine. Um. It revolves around transfer pricing. UH.

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<v Speaker 1>It's a very deep technical subject that involves accounting, tax

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<v Speaker 1>and economic rules, and for for decades, the o e

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<v Speaker 1>c D has has its own set of rules, the

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<v Speaker 1>o e c D Transfer Pricing guidelines. And then, as

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<v Speaker 1>a Dara has pointed out, a couple of years ago,

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<v Speaker 1>these the state aid cases started and the United States

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<v Speaker 1>would argue that, Um, the European Commission is coming up

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<v Speaker 1>with its own set of transfer pricing rules and it's

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<v Speaker 1>those rules that are playing in this case. So, Kevin,

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<v Speaker 1>have you ever heard anything like this is worth the

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<v Speaker 1>Irish government saying no, no, we don't want the money

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<v Speaker 1>we want to They don't want to antagonize all those

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<v Speaker 1>U S corporations that they want to keep doing business

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<v Speaker 1>in Ireland. Um. In the TACs world, it's a very

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<v Speaker 1>bizarre dynamic that. Um, you you have a government saying

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<v Speaker 1>I don't want tax revenue. But from Ireland's perspective, it's

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<v Speaker 1>very very understandable. UM. Ireland's tax regime has has been

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<v Speaker 1>a huge selling point to tow US companies. You only

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<v Speaker 1>have to be at double in airport to see the

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<v Speaker 1>US executives and computer folk. UM. So this this whole

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<v Speaker 1>situation that's been a real headache for the Irish government

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<v Speaker 1>and Dared Doyle, Um, like you've written a few different

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<v Speaker 1>stories touching on the possibility of an appeal, how would

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<v Speaker 1>that work. Well, first of all, think it's really important

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<v Speaker 1>to make a one point here. What's not on the

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<v Speaker 1>threat here is Ireland's corporate tax rate, which is twelve

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<v Speaker 1>point five percent. This case is not about our twelve

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<v Speaker 1>point five percent rate, which is really the key to

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<v Speaker 1>attracting companies like Google and Facebook LinkedIn to Ireland. It's

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<v Speaker 1>very important to remember that, as Kevin said, sort of

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<v Speaker 1>a dB technically as you hear about transfer pricing and

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<v Speaker 1>whilest deals done on the side, you know, with Apple

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<v Speaker 1>and Ireland to kind of let them pay left. But

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<v Speaker 1>very clearly what this isn't about the twelve point five

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<v Speaker 1>percent rate, which will which will remain the pillar of

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<v Speaker 1>Irish economic policy. That is very clear on that one.

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<v Speaker 1>So in fact, the implications of this case may not

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<v Speaker 1>be huge in that it doesn't seem like any other

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<v Speaker 1>US corporased operating Ireland are facing similar probe, at least

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<v Speaker 1>not that we know at this point. So you know,

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<v Speaker 1>there isn't that threat there. But in terms of the

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<v Speaker 1>appeal of what will happen, I mean it's in the

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<v Speaker 1>very start Ireland that will fight is all the way

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<v Speaker 1>to the court. They have employed very expensive lawyers in

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<v Speaker 1>London to begin the process that they've embracing for new

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<v Speaker 1>Rude the last two years. So what lit will disappearance

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<v Speaker 1>of the court could be five years or so. In

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<v Speaker 1>the meantime, Apple will pay the money to Ireland. I

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<v Speaker 1>don't will keep it in a special ring fenced account

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<v Speaker 1>and they won't said they won't spend they won't spend

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<v Speaker 1>that money. What's interesting now is that people aren't up

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<v Speaker 1>beginning to say, but hold on, you guys want to

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<v Speaker 1>us don't want this money. This money could buy as hospital, schools,

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<v Speaker 1>et cetera. And so it's litical pressure is beginning to

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<v Speaker 1>build a little bit. You know. Now people are focusing

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<v Speaker 1>on the routing. We're gonna connect tomorrow and say, hump,

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<v Speaker 1>let's just make any sense take you know's gonna take

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<v Speaker 1>this calash So it's gonna be very interested. Dynamic's my

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<v Speaker 1>point of view. Fascinating. Der Doyle laying out the story

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<v Speaker 1>with his bureau chief in Dublin for Bloomberg News as

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<v Speaker 1>well as our senior international tax reporter, Kevin Bell. I'm

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<v Speaker 1>Kathleen Hayes. This is Bloomberg