I reject the assertion in the report mentioned that Advanced Pricing Agreements are "sweetheart deals" with taxpayers. Ireland does not do "deals" with taxpayers. Our tax system is founded on the strict application of the law, as enacted by the Oireachtas, without exception.
Revenue do not issue unilateral Advance Pricing Agreements. The Apple case concerns two advance opinions issued by Revenue in 1991 and 2007.
Revenue has published detailed guidelines on the provision of tax opinions which are available on Revenue's website at www.Revenue.ie. While it is open to any taxpayer to seek an opinion from Revenue on the tax treatment of a particular transaction or activity, the circumstances in which a taxpayer should require an opinion from Revenue are relatively limited. This is because Revenue already publishes extensive detailed information on the application of tax legislation in various tax briefings and guidelines which are available on the Revenue website.
An opinion will be provided by Revenue where the issues are complex, information is not readily available or there is genuine uncertainty in relation to the applicable tax rules as set down in the legislation. An opinion will provide Revenue's view of the correct application of tax law to a particular transaction or situation so that the taxpayer can file a correct tax return as required under the legislation.
In no case has Revenue the authority or discretion to depart from the applicable rules as set out in tax law.
In relation to Advanced Pricing Agreements more generally, I would highlight that they are a standard feature of the international tax system. Taxpayers can seek such an agreement where they want certainty that they are correctly applying transfer pricing rules. One of the recommendations from the OECD Base Erosion and Profit Shifting (BEPS) Project was that countries should implement bilateral APA programmes to provide greater certainty in relation to the taxation of cross-border transactions. Acting on this OECD recommendation, Revenue introduced a formal bilateral Advance Pricing Agreement programme and the guidance on how the programme is operated is available on the Revenue website. As I have already mentioned, Revenue do not issue unilateral Advance Pricing Agreement so such agreements will only be issued if the tax authorities in both countries impacted by a transaction are satisfied that the correct pricing is being applied.
At EU level, Member States have agreed a Directive to require the automatic exchange of both tax opinions or 'rulings' and Advanced Pricing Agreements between tax authorities in Member States. I was an enthusiastic supporter of this Directive. I expect to have completed the transposition of this Directive into Irish law through a combination of Regulations and Finance Bill changes by the end of this year.
