Friday

29th Mar 2024

Ireland appeals Apple ruling, after 'intense' talks

  • Dublin: Not the first time Ireland has been forced to deny that it was a tax haven (Photo: Giuseppe Milo)

The Irish government narrowly avoided a split on Friday (2 September), before agreeing to appeal a European Commission ruling that ordered tech-giant Apple to pay the Irish state €13 billion, plus interest, in unpaid taxes.

The three independent MPs in Ireland’s ruling coalition earlier in the week were said to have “balked” at the idea of appealing a ruling that, on the face of it, allowed Ireland to pour up to €19 billion into its exchequer.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

But in the end, during Friday’s “intense” 30-minute cabinet meeting and after three days of internal strife, an agreement was clinched to order the attorney general to initiate proceedings at the European Court of Justice.

In exchange for the independents’ support, ministers from the Fine Gael party, the centre-right senior coalition partner, agreed to a “full review” of tax arrangements for multinationals in Ireland to be carried out by an outside expert.

The deal came despite the fact that a similar review was already carried out two years ago.

It also came despite concerns, a senior cabinet source told EUobserver on condition of anonymity, that the review “risked” giving the impression that Ireland had other tax secrets to hide.

In addition, the Irish Parliament has been recalled for a full debate next Wednesday (7 September).

Education minister Katherine Zappone (independent) said Ireland should enter a “robust era of tax justice”, while the main opposition party, the nationalist Sinn Fein, is calling for full disclosure of the facts and figures in the Apple case.

Whatever the debate may bring, the government has promised foreign investors that its low 12.5-percent corporate tax rate, as well as other incentives, such as tax credits for R&D operations, remained “sacrosanct”.

The transport minister, Shane Ross (independent), also said corporations should be “seen to be paying their fair share”, but added that multinationals are “vital” for creating jobs.

Both the Irish government and Apple have denied the commission’s findings, and were quick to attack competition commissioner Margrethe Vestager when she issued her decision earlier this week.

Finance minister Michael Noonan described the retrospective nature of the commission’s investigation as “bizarre and outrageous.”

Not first time

It is not the first time that Ireland has been forced to deny that it was a tax haven.

The senior Irish cabinet source, who asked to remain anonymous, said that severe tax avoidance on the Apple model had been allowed “in the past”, but it had ended when Ireland abolished a loophole concerning “stateless companies”.

Dan O’Brien, chief economist at the Institute of International and European Affairs, a think tank in Dublin, said Ireland is not a tax haven because tax havens typically involve illegal tax evasion.

“Nobody has ever accused Ireland of tax evasion”, he told this website, adding that the question that the government will have to ask itself is: “When does avoidance become excessively aggressive?”.

The Irish government is also accusing the EU commission of using state aid rules to interfere in Irish tax policy.

Each EU member state has full competency over tax affairs, but Ireland has come under severe pressure in recent years by Europe to alter its corporate tax regime.

Pressure on tax

In 2011, shortly after it received an €85 billion bailout from the EU and the International Monetary Fund, France said that if Ireland wanted relief on the high interest rate due, it would have to increase its corporate tax rates.

Ireland refused to budge, because the low corporate rate is a cornerstone of its economic model.

For O’Brien, the commission’s current attack is also political and is linked to Ireland’s diminutive status.

He noted that Brussels gave France and Spain preferential treatment on fiscal rules, but picked a fight with Ireland because it believes that it would win.

The commission is becoming “more politicised”, and "when you’re picking fights, you pick ones that you can win,” said O’Brien.

Irish government in moral dilemma on Apple tax

Anti-poverty activists in Ireland say the government's decision to appeal an EU commission order for Apple to pay back €13 billion undermines its moral authority.

Opinion

Why UK-EU defence and security deal may be difficult

Rather than assuming a pro-European Labour government in London will automatically open doors in Brussels, the Labour party needs to consider what it may be able to offer to incentivise EU leaders to factor the UK into their defence thinking.

Latest News

  1. Kenyan traders react angrily to proposed EU clothes ban
  2. Lawyer suing Frontex takes aim at 'antagonistic' judges
  3. Orban's Fidesz faces low-polling jitters ahead of EU election
  4. German bank freezes account of Jewish peace group
  5. EU Modernisation Fund: an open door for fossil gas in Romania
  6. 'Swiftly dial back' interest rates, ECB told
  7. Moscow's terror attack, security and Gaza
  8. Why UK-EU defence and security deal may be difficult

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Stakeholders' Highlights

  1. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  2. UNOPSFostering health system resilience in fragile and conflict-affected countries
  3. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  4. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  5. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  6. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA

Join EUobserver

EU news that matters

Join us