Corporate investments

in fiscal havens
 Why do so many corporation chose
to invest in Ireland ?

- its strong and tightly knit industrial and

tertiary fabric

- it has one of the lowest corporate tax rate

in Europe

- its young and skilled workforce

- its competitive economy

- its modern infrastructure

 Protection of Foreign Investment

Bilateral investment conventions signed by Ireland

Organizations Offering Their Assistance in Case of

Disagreement

Member of the Multilateral Investment Guarantee

Agency
 Country comparison for the
protection of investors
Ireland OECD United Germany
States
Index of 10.0 6.0 7.0 5.0
Transactio
n
Transparen
cy*
Index of 6.0 5.0 9.0 5.0
Managers
Responsibi
lity**
Index of 9.0 7.0 9.0 5.0
Sharehold
ers
Power***
Index
Source: of 8.3
Doing Business - 2016. 6.1 8.3 5.0
Investor
Protection
 FDI in figures
Despite the financial crisis, Ireland has maintained its position as an attractive
investment destination and has some of the highest inflows and stocks of FDI in the
European Union.

Foreign 2013 2014 2015

Direct
Investment
FDI Inward 44,899 31,134 100,542
Flow(million
USD)
FDI 392,915 378,202 435,490
Stock(million
USD)
Number of 180 194 204
Greenfield
Investments*
**
FDI 106.8 64.3 191.9
Inwards(in %
Source: UNCTAD, 2015
 FDI Inflows By Countries and Industry

Main 2014, in % Main 2014, in %

Investing Invested
Countries Sectors
Netherlands 37.3 Information 18.8
and
Bermuda 22.8 communicati
on services
United States 15.2
Pharma 17.1
Luxembourg 9.8 manufacturin
g
Belgium 6.4
Other 47.0
services
Japan 5.4
activities

Source: Central Statistics Office - 2016.

 What is a tax haven ?
The European definition of a tax haven is a
country that cuts deals with foreign companies
that dont do any business there.
Is Ireland a tax haven for corporation?

Ireland is referred to as a tax haven because of the

country's taxation and economic policies.

Legislation heavily favors the establishment and

operation of corporations

The economic environment is very hospitable for all

corporations, especially those invested in research,
development and innovation.
 If Ireland was a legitimate low-tax country, all
of Apples Irish affiliates would be paying the
statutory 12.5% rate on their income. Instead,
those Apple affiliates that do pay Irish tax
appear to be paying a lower rate due to a
special income calculation.
 Apple investment
Following an in-depth state aid investigation launched
in June 2014, the European Commission has concluded
that two tax rulings issued by Ireland to Apple have
substantially and artificially lowered the tax paid by
Apple in Ireland since 1991.

That enables Apples Irish principal company

through which most of its sales income flowsto pay
tax nowhere.
 Moreover, the Irish holding company and the
Irish principal company have not paid any tax
to any government for the past few years.
 E.U. ruling against Apple

This selective tax treatment of Apple in Ireland is

illegal under EU state aid rules, because it gives Apple
a significant advantage over other businesses that are
subject to the same national taxation rules.

The Commission can order recovery of illegal state aid

for a ten-year period.

Ireland must now recover the unpaid taxes in Ireland

from Apple for the years 2003 to 2014 of up to 13
billion, plus interest.
 The European Commission has concluded that
Ireland granted undue tax benefits of up to 13
billion to Apple.

Ireland must now recover the illegal aid.

Apple and Ireland said they intend to

appeal against the ruling.
What does 13bn mean to Ireland?

more than the 12.9bn annual

government spending on the Irish
health service

nearly one-third of Irelands total

government tax revenue in 2015,
which was 45.6bn.

It is also the equivalent of 2,830 for

every one of Irelands 4.6 million
 What is at stake for Ireland if the ruling will
be against Apple?

First of all, Ireland will lose a lot of its

credibility in the eyes of investors.
It will create a precedent which will open
many other investigations for other
corporate investments which operate in
Ireland.
The other corporations can sueIreland,
because offering special tax deals means a
competitive advantage for Apple, which
will create losses for the competitors.