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Irish Finance Minister Michael Noonan speaks with CNBC’s “Squawk On The Street”

Following are excerpts from a CNBC interview on Squawk on the Street with Irish Finance Minister Michael Noonan.

David Faber: Back to that big news on apple this morning, joining us from Dublin is Ireland's finance minister, Michael Noonan. Minister Noonan nice to have you with us on CNBC this morning.

Michael Noonan: Thank you very much indeed.

Faber: You're welcome. by referencing a report out in May of 2013 from our US senates permanent subcommittee on investigations, this was in the news at the time, they were looking at apple specifically amongst a number of other companies in terms of the taxes paid and they said at the time, that apple -- and I'm quoting here, has quietly negotiated with the Irish government an income tax rate of less than 2% well under the Irish statutory rate of 12%, as well as the tax rates of other countries and the united states. that appears to be where the EU is focused in terms of this 14.5 billion. was that assertion correct and why are you disputing the EU's desire to get that money back?

Noonan: well, we always challenged that particular incertion. apple paid all the tax that was due for their activities in Ireland. the OECD who have been at the forefront of reforming corporation tax say the tax should apply where the economic activity occurs, which generates the profit. now, on my -- the back of my apple iPhone, it says, designed in California, manufactured in china. so I can see how the Irish authorities would have a tax liability for economic activity that takes place in other jurisdictions.

Faber: and this idea that was first introduced in May of 2013 by our own senate in the U.S that apple quietly negotiated a special deal with the Irish government that is not true?

Noonan: the Irish revenue doesn't do deals. they issue opinions to clarify, a tax situation for individual companies. but we never do deals. they have to apply the tax law, which is passed by parliament, and they have to do so without fear or favor across all companies. so I know there's general tendency to think that apple isn't paying enough tax, but our point is that if they owe tax, they do not owe it to the Irish authorities. they may owe it elsewhere, but not to the Irish authorities.

Faber: the EU's assertion is they owe 14.5 billion dollars to Ireland. you don't seem to want to, why not?

Noonan: well, first of all, we stand by the legitimacy of what was done in the past. nobody did a deal with apple and we stand over that. secondly, we think the commission is getting involved in what is the competence of sovereign governments in Europe. the Europe treaties say that individual countries are responsible for taxation policy. and this is an approach through the back door, to try and influence tax policy, through competition law, and we don't agree with that, but more importantly, we think they're in breach of international tax practice, where tax liability follows economic activity, and the economic activity on which they're raising the tax assessment in Ireland, did not occur in Ireland.

Sara Eisen: so do you see this minister as a power play by Brussels?

Noonan: no I think Brussels has changed its position in recent years and it has pursued a number of countries in the smaller countries a number of companies in the smaller countries like Starbucks and fiat and so on, in Luxemburg, Belgium and Holland and they are pursuing others, I think they've overreaching on their competence and even in the commissioner's statement today, she said that if other countries feel they're entitled to some of this tax, they should lineup and go after it. and that is -- sounds to me like somebody is not sure that the liabilities is Ireland's liability.

risen: I just wonder with this overreach, if you're worried or you expect this to fuel anti-EU and anti-euro sentiment? a little over two months ago, Britain voted to leave the EU and part of the argument was that they didn't want to be bossed around by unelected bureaucrats in Brussels. and I wonder if you are expecting that to resonate with the people of Ireland after this decision?

Noonan: now, there's legal process in place. now that the commission has reached a finding, we have the right to appeal it and we have a meeting of our government tomorrow, and I will advise the government to appeal this decision. and I expect the government to decide to appeal it. and then it goes to adjudication of the European courts and the European courts will do a full assessment of what the competition commission has decided, and what the reasons are behind it. and of course, when that reaches a conclusion, we'll abide by the decision. but we believe at present that their competition commission is an error and we are going to challenge that by way of appeal to the European courts.

Faber: minister Noonan, this is not the first time that Ireland has come under focus for its tax practices. apple actually has quite a few employees in the country, but we've been focused in this country on companies that invert, they move their tax status, their jurisdiction, to another country where they have little more than a storefront, and oftentimes that does end up being Ireland, which has an extraordinarily low overall corporate tax rate. is that fair?

Noonan: well, apple employs about 6,000 people in Ireland, and they are heading towards 6,000, so they have a very strong economic presence in the country. on the question of inversion, that's a matter for U.S tax law. we don't invite U.S companies to come to Ireland on the basis of inversion, and we don't welcome them when they come. but under an international law, we're not in the position to prevent them. but if the U.S authorities wish to do something about inversion, well, then it's a matter for the U.S authorities to change the law.

risen: and just as a matter of where this money would go if the EU does get its way, we understand that the rules in the European union is it would have to go down to pay your debt. and Ireland currently has a debt that is nearly 100% of its economy, after the bank bailouts, the national debt is $200 billion. how are you going to explain to the Irish taxpayers and your opposition that you can't take that money to pay down the debt?

Noonan: well first of all, the Irish debt at the end of this year will be under 80% of GDP. secondly, the European authorities wearing a different hat will regard this as a windfall amount of money and they would require us in the first instance to reduce the debt. but they also, as long as it's not used for ongoing expenditure, there might be some scope to use it eventually for capital investment. but that would be after the appeal process has gone through, and that is a number of years down the line.

Faber: minister Noonan, we appreciate you joining us. thank you.

Noonan: thank you very much indeed.

Faber: Michael Noonan is the Irish finance minister.