Speaker 1: Another big story today, just breaking in the last hour
Speaker 1: or so, Apple facing a potential tax bill running into
Speaker 1: billions of euros with the EU. The European Union poised
Speaker 1: release of finding into its dealings in Ireland as soon
Speaker 1: as Tuesday. Dared Doyle joins us, and now he is
Speaker 1: one of the These are actually our Dublin bureau chief.
Speaker 1: He's been writing a lot about what's going on with
Speaker 1: Apple in this whole tax and version situation. Also, we're
Speaker 1: joined by senior international national tax or reporter Kevin Bell
Speaker 1: for Bloomberg News. So welcome, gentlemen, and Daryl, let's start
Speaker 1: with you set the table for us of of what
Speaker 1: what has been going on between Apple and the EU
Speaker 1: and what's about to happen. Yes, this has been gone
Speaker 1: back a couple of years where the European Commissioners were
Speaker 1: looking into Apple tax arrangements in Ireland, and as far
Speaker 1: back as two thousand and fourteen they gave us some
Speaker 1: glimmery findings that they reckoned that Ireland had given essentially
Speaker 1: given Apple some tax breaks in return for some jobs.
Speaker 1: And what we've all been waiting for is the amount
Speaker 1: of the arrears of Apple might pay. And that's kind
Speaker 1: of a gathering page on speculations. It could be very little,
Speaker 1: around a hundred million euros, but we've learned this evening
Speaker 1: is that the arrears and will run into billions of euros.
Speaker 1: We have made been any more specific than that, but
Speaker 1: we're talking at big number here. I mean, like in
Speaker 1: the context, I mean Apples sitting on about two h
Speaker 1: billion euros of cash. So it's not short few dollars,
Speaker 1: but still two billion or so and going to be
Speaker 1: pretty for Apple if that's the way it turns out tomorrow.
Speaker 1: So what what's at stake than for for Ireland and
Speaker 1: for how this is going to play out in terms
Speaker 1: of future cases, for future disputes. That's a good question.
Speaker 1: Aren't in a very usual position? Apple is going to
Speaker 1: actually have to pay this money to Ireland? Okay? But
Speaker 1: Iren the saying we don't want this money. Okay, we
Speaker 1: don't want your two billion, you keep your two billion.
Speaker 1: The reason being is they're afraid of tarnishing their reputation.
Speaker 1: The seas weeks in the US, and we've got a
Speaker 1: number of companies here, Facebook, Google, Iron needs to show
Speaker 1: the standing shoulder to show there will Apple on this issue,
Speaker 1: because if it doesn't be a concern that US companies
Speaker 1: to get nervous about Iron's commitments to the multinational sector
Speaker 1: that's such an important part of our economy. So bizarre
Speaker 1: situation in our government saying no, we don't want your
Speaker 1: two three four billion that even though that could possibly
Speaker 1: you know, by you know, more schools and more hospitals, etcetera, etcetera.
Speaker 1: And the reason that is is a concern about tarnishing
Speaker 1: or incloss reputation. So there's a lot of safe here
Speaker 1: for Iron's Arn't has vowed to fight this all the
Speaker 1: way to the final course in the European courts. Um.
Speaker 1: So there's a long way to go to This could
Speaker 1: be another five years and this before we see any
Speaker 1: money coming to Ireland. And it's a long way to
Speaker 1: go into one. All right, So Kevin, you jump in
Speaker 1: with us, as I said, he's our senior international tax reporter,
Speaker 1: Kevin Bell. So so what does the specific UH law
Speaker 1: that is this whole tax this whole decision is hinging
Speaker 1: on right now, High Catherine. Um. It revolves around transfer pricing. UH.
Speaker 1: It's a very deep technical subject that involves accounting, tax
Speaker 1: and economic rules, and for for decades, the o e
Speaker 1: c D has has its own set of rules, the
Speaker 1: o e c D Transfer Pricing guidelines. And then, as
Speaker 1: a Dara has pointed out, a couple of years ago,
Speaker 1: these the state aid cases started and the United States
Speaker 1: would argue that, Um, the European Commission is coming up
Speaker 1: with its own set of transfer pricing rules and it's
Speaker 1: those rules that are playing in this case. So, Kevin,
Speaker 1: have you ever heard anything like this is worth the
Speaker 1: Irish government saying no, no, we don't want the money
Speaker 1: we want to They don't want to antagonize all those
Speaker 1: U S corporations that they want to keep doing business
Speaker 1: in Ireland. Um. In the TACs world, it's a very
Speaker 1: bizarre dynamic that. Um, you you have a government saying
Speaker 1: I don't want tax revenue. But from Ireland's perspective, it's
Speaker 1: very very understandable. UM. Ireland's tax regime has has been
Speaker 1: a huge selling point to tow US companies. You only
Speaker 1: have to be at double in airport to see the
Speaker 1: US executives and computer folk. UM. So this this whole
Speaker 1: situation that's been a real headache for the Irish government
Speaker 1: and Dared Doyle, Um, like you've written a few different
Speaker 1: stories touching on the possibility of an appeal, how would
Speaker 1: that work. Well, first of all, think it's really important
Speaker 1: to make a one point here. What's not on the
Speaker 1: threat here is Ireland's corporate tax rate, which is twelve
Speaker 1: point five percent. This case is not about our twelve
Speaker 1: point five percent rate, which is really the key to
Speaker 1: attracting companies like Google and Facebook LinkedIn to Ireland. It's
Speaker 1: very important to remember that, as Kevin said, sort of
Speaker 1: a dB technically as you hear about transfer pricing and
Speaker 1: whilest deals done on the side, you know, with Apple
Speaker 1: and Ireland to kind of let them pay left. But
Speaker 1: very clearly what this isn't about the twelve point five
Speaker 1: percent rate, which will which will remain the pillar of
Speaker 1: Irish economic policy. That is very clear on that one.
Speaker 1: So in fact, the implications of this case may not
Speaker 1: be huge in that it doesn't seem like any other
Speaker 1: US corporased operating Ireland are facing similar probe, at least
Speaker 1: not that we know at this point. So you know,
Speaker 1: there isn't that threat there. But in terms of the
Speaker 1: appeal of what will happen, I mean it's in the
Speaker 1: very start Ireland that will fight is all the way
Speaker 1: to the court. They have employed very expensive lawyers in
Speaker 1: London to begin the process that they've embracing for new
Speaker 1: Rude the last two years. So what lit will disappearance
Speaker 1: of the court could be five years or so. In
Speaker 1: the meantime, Apple will pay the money to Ireland. I
Speaker 1: don't will keep it in a special ring fenced account
Speaker 1: and they won't said they won't spend they won't spend
Speaker 1: that money. What's interesting now is that people aren't up
Speaker 1: beginning to say, but hold on, you guys want to
Speaker 1: us don't want this money. This money could buy as hospital, schools,
Speaker 1: et cetera. And so it's litical pressure is beginning to
Speaker 1: build a little bit. You know. Now people are focusing
Speaker 1: on the routing. We're gonna connect tomorrow and say, hump,
Speaker 1: let's just make any sense take you know's gonna take
Speaker 1: this calash So it's gonna be very interested. Dynamic's my
Speaker 1: point of view. Fascinating. Der Doyle laying out the story
Speaker 1: with his bureau chief in Dublin for Bloomberg News as
Speaker 1: well as our senior international tax reporter, Kevin Bell. I'm
Speaker 1: Kathleen Hayes. This is Bloomberg