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Ireland writes to U.S. Senators to reject tax claims

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(Globalpost/GlobalPost)

DUBLIN (Reuters) - Ireland has formally rejected claims by U.S. Senators Carl Levin and John McCain that Ireland is a tax haven and that it handed Apple a special tax deal.

Ireland's ambassador to the United States Michael Collins has written a letter to the two senators emphasizing that Ireland's tax system is transparent, according to the text released by the finance ministry on Friday which echoed points made by Irish ministers and officials.

Ireland has been forced to defend its low corporate tax rate after the Senate heard last week that the iPhone and iPad maker paid little or no tax on tens of billions of dollars in profits channeled through Irish subsidiaries and had effectively negotiated a special corporate tax rate of less than 2 percent.

"Ireland's tax system is set out in statute - so there is no possibility of an individual special tax rate being negotiated for companies," Collins wrote in a non-confrontational letter dated May 29 which was also sent to other members of Levin's Senate subcommittee.

"The memorandum to the Permanent Subcommittee refers to Ireland as a 'tax haven'. As you will be aware, the OECD has identified four key indicators of a tax haven. None of these criteria applies to Ireland."

Dublin has begun a diplomatic offensive to repair the damage done to its reputation from the allegations and Finance Minister Michael Noonan went on the attack last week, saying Ireland would not be the "whipping boy" for the U.S. Senate.

Apple chief executive Tim Cook told a conference this week that the company does not have a special deal with the Irish government that gives it a 2 percent flat rate of tax.

(Reporting by Padraic Halpin; editing by Stephen Nisbet)

http://www.globalpost.com/dispatch/news/thomson-reuters/130531/ireland-writes-us-senators-reject-tax-claims