Today in the pressFriday 07 March 2014 11.17
APPLE PAID $36m TAX ON $7.11 BILLION PROFITS AT IRISH UNIT - Detailed figures have emerged to illustrate how Apple has managed to pay almost no corporation tax for years on billions of dollars of revenue earned in other countries, using unlimited Irish entities. According to accounts obtained by the Irish Times for one of those unlimited companies, Apple Sales International (ASI), the consumer electronics giant cut its Irish tax bill by more than $850 million between 2004 and 2008, using an unexplained “lower rate”. ASI provides “sales and marketing services” to Apple subsidiaries around the world that sell iPods and iPads. Between 2004 and 2008, it reported profits before tax totalling $7.11 billion on sales of more than $29 billion. The accounts for those years state the corporation tax that would be due using Ireland’s 12.5 per cent rate - $890 million over the five years. But they also show how much corporation tax ASI actually paid to Irish authorities - just $36 million. The difference between the two figures is explained each year by saying some profits were taxed at “lower rates” than Ireland’s headline 12.5 per cent corporate tax rate. The accounts do not explain by whom or how this rate was decided, or in what jurisdiction the lower tax was paid. “The current tax charge is lower than the standard rate in Ireland, ” the accounts say. There is no suggestion that Apple’s accounting was in any way illegal.
HMV RESCUER HILCO LAUNCHES BIT FOR SPORTS CHAIN ELVERYS - The company behind the rescue of HMV and Xtravision has now launched a bid to buy sports chain Elverys, the Irish Independent has learned. There are now a total of six parties in the frame to buy the Co Mayo business, which employs 650 people in 56 stores across Ireland. The remaining six bidders have advanced to a due diligence stage following indicative offers received by a court-appointed examiner in recent weeks. Remaining bidders include Hilco, the investment company best known for buying and relaunching HMV here after it fell into receivership, the Independent understands. Hilco specialises in buying and turning around struggling retailers. It faces competition for the Elverys chain from investor Mike Ashley's UK-based Sports Direct group and a group led by Elvery's own managing director Patrick Rowland. Simon Coyle, of Mazars, was appointed as examiner of Elverys on February 4 last. He has up to a maximum of 100 days to secure an investment plan to save the business.
DUBLIN PORT PLANS €200m DEVELOPMENT - The Dublin Port Company is hopeful of completing the first major phase of its ambitious 30-year €600m development plan within the next five years, writes the Irish Examiner. The €200m redevelopment of the Alexandra Basin site will create 200 construction-related jobs over the course of its five-year building phase and allow for an estimated increase in overall port volumes of 30% over a 10-year period. The company has lodged a planning application for the project with An Bord Pleanála and is hopeful of receiving approval within 12 months. Following that, it is envisaged that work will commence immediately and finish in 2019. Dublin Port Company chief executive, Eamonn O’Reilly said the ABR (Alexandra Basin Redevelopment) project “will give us the infrastructure, capacity and versatility needed to future-proof Dublin Port; catering for larger-sized vessels and increased trade volumes as Ireland returns to economic growth”.
GEORGE OSBORNE FACES £20 BILLION BLACK HOLE - UK finance minister George Osborne faces a black hole of more than £20 billion in the public finances, according to official government economic models. The news suggests that Britain might have to endure an extra year of austerity before the books are balanced. The models by the Office for Budget Responsibility, which the Financial Times has replicated, indicate that the government should no longer rely on an economic recovery to eliminate part of the budget deficit. While Britain has staged a remarkable recovery, indicators of the economy’s capacity for future growth have deteriorated. With unemployment falling quickly, the figures show that companies may have little room to expand production rapidly. The estimates come less than two weeks before Budget day and pose a difficult challenge to whichever party wins the election. If the models are correct, the next government would have to announce new spending cuts or tax rises to eliminate the structural deficit and ultimately to run a surplus.