Richard Boyd Barrett: Calls corporate tax avoidance 'obscene' theft
Richard Boyd Barrett spoke on corporate tax avoidance, focusing on Apple and similar multinationals and arguing they pay negligible tax while governments and revenue authorities knew. He accused corporate chiefs and politicians of enabling a system that robs public revenues needed for services.
Key accusation
The deputy argued that the scale of tax avoidance by large corporations is tantamount to theft, citing the general court ruling that showed Apple paid 0.005% tax on vast profits. He said the court could not prove selective advantage but that the derisory tax levels were achieved by routing profits through companies incorporated in this jurisdiction.
How the mechanism operates
He explained the mechanism centres on intellectual property - companies allocate profits to an entity that holds the IP and is tax resident nowhere, then claim large royalty payments to reduce taxable profits. He said firms effectively write their own tax bills by assigning most profits to the idea-holder and reducing taxable income to negligible levels.
Scale of profits and disputed tax rates
Between 2013 and 2018 gross trading profits in this country rose from 83 billion to 190 billion, a 228% increase, he noted. In 2018 he said corporate tax paid was 10.4 billion, far below the roughly 23 billion that would correspond to a 12.5% rate, and rejected assertions that the effective rate was 11.6%.
Impact on workers and public services
He argued the practice insults workers by attributing value solely to intellectual property while frontline and essential workers produced and maintained services, especially during the pandemic. He warned the arrangements are robbing people here and globally of revenues for health, education, housing and infrastructure.
Ongoing problem after reforms
He said that after the double Irish was ended new doors were opened and similar arrangements continue, benefiting a select group of IT and some pharmaceutical companies rather than domestic small and medium enterprises. He described the continuation of these practices as shameful and a diversion of revenue from public needs.
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Thanks, Las. Masks like this, Las Ken Crawler, are sometimes associated with stick-up robberies. And it's kind of appropriate that now it's the politicians who are wearing the masks that are involved with stick-up robberies, but it might be even more appropriate for the chief executives of some of the biggest and wealthiest corporations to be wearing. Masks associated with stick-up robberies, because the scale of their theft of tax revenues that should accrue to society in general from the absolutely staggering profits that these corporations make. And they make them from people and workers and pay negligible levels of tax is just obscene. And if you don't start from that point, to be honest with you, you're just being dishonest, Minister. You're just being plain dishonest. Because what the court did not dispute in its ruling was that Apple paid 0.005% tax on vast amounts of profits. Now, that is obscene. There's no two ways about it. And it succeeded in paying that derisory level of tax on vast profits on companies, or working through companies that were incorporated in this jurisdiction. Now, the fact that the general court concluded that the commission could not prove that the Irish revenue authorities conferred selective advantage on Apple does not take from the fact that they achieved that here. And does anybody seriously believe that revenue and the government didn't know that that's what was happening? Does anybody believe that for one single second? Unless we imagine that revenue and the governments of the day were complete idiots, and I don't think anybody believes that for one second, they knew. They knew what was going on. They knew the derisory levels of tax that were being paid. But the commission couldn't prove, although it believes, that that was an arrangement that was designed specifically for Apple. I have always thought that it's not just Apple who benefited from it, but a select group of IT companies, which would include, and possibly some pharmaceutical companies, who would benefit from these kinds of arrangements. But they are certainly not arrangements that the vast majority of domestic small or medium enterprise in this country would benefit from. So, in that sense, it's a very select advantage, which is conferred on these enormously wealthy companies. And, of course, the trick in all of this is centered, and this is not a historic issue, Minister, around intellectual property. And I love this, intellectual property. And, in fact, in a way, allowing them, as they still do, to allocate profits to the company that is tax resident nowhere, but is the holder of intellectual property, the idea, and say they can allocate any amount of that profit they want to the company that owns the intellectual property. And that's what they do. Every year, they just say, oh, our profits are 1 billion, we'll give 990 million in royalties to the owner of the intellectual property who's tax resident nowhere, writing down our taxable profit to negligible levels. And that's what they do. So, they effectively write their own tax bill, and we allow them to do it. But, by the way, it's an insult to the workers that often the government go on and say, we must defend the workers in Cork and their jobs. Absolutely, we should. But the idea that all of the wealth is generated by a company tax resident nowhere that has the idea is insulting, actually, to the workers who produce the iPhones, and, indeed, to those who do the selling of those phones all across the world and across Europe. Apparently, their labor, their activity is worth nothing, it's all given to the idea, right? Now, as we've seen during the pandemic, Minister, the people, the ideas and the CEOs weren't the people who kept us going and kept everything moving during a pandemic. It was actually the workers who do the physical work, the essential workers, the frontline workers. So, it's an ideological notion, apart from anything else, that you can attribute all this value to the idea, to the intellectual property. It's a very capitalist, very neoliberal idea which we should reject. But that's just an aside on my part. But the crucial point is none of this is historical. Between 2013 and 2018, in other words, after the events, profits in this country, corporate profits, have gone from 83 billion to 190 billion. That is a 228% increase in corporate profits, gross trading profits. So, in 2018, 190 billion euro in profits. Massive increase. How much tax was paid? 10.4 billion. That's not 12.5%, Minister. No matter how much you assert again and again that they're paying 11.6% as you just did, they're not. If they were paying 12.5% or even 11.6%, they'd be paying about 23 billion euro in tax. How are they getting away with that? They are writing down their taxable profits on the basis of royalties to the idea. For a company that possesses the idea, the intellectual property, and therefore they siphon off the profits so that the taxable profits are derisory. Bringing down their tax rate to illegible levels. So, it's still going on, after pressure domestically and internationally forced you to do away with the double Irish, which was the mechanism through which Apple avoided the taxes in the period covered by this ruling, you opened new doors for them. And it still goes on. And it is shameful. And it is robbing people, not just in this country, but across the world, of revenues that we need for health, education, housing and infrastructure.
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