18th Mar 2018

Irish government in moral dilemma on Apple tax

  • Irish PM Edna Kenny. The decision to appeal the EU commission's decision is an exemple of "politicians taking the side of big business," an activist said. (Photo: European People's Party)

The Irish government’s decision to appeal a European Commission ruling that US tech firm Apple must pay back taxes is likely to have serious ramifications for its “moral authority” in some corners of the Irish public, according to anti-poverty groups and activists.

Father Peter McVerry, a leading anti-homeless campaigner, said it is another example of "politicians taking the side of big business", while citizens "are left to pay."

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

The decision to appeal a potential €13 billion bounty, plus interest, for the Irish exchequer could impact the government’s standing among members of the electorate most hit by the various tax hikes and reductions in public services imposed during years of austerity.

Irish parliamentarians were recalled two weeks ahead of schedule on Wednesday (7 September) to debate the ruling and the state’s reaction to it.

The government was supported during the debate by the other two mainstream parties, the centre-right Fianna Fail and Labour, both of which have been instrumental in establishing Ireland’s corporate tax regime over the last decades.

Fianna Fail spokesman on finance Michael McGrath echoed earlier comments made by finance minister Michael Noonan in accusing the European Commission of “encroaching” on the sovereignty of a member state, in the area of taxation, which is explicitly defined as an area of national power.

McGrath also said that instead of accepting the money ordered by the commission to be recouped by the state, it was necessary to “take a long view”, and protect the invaluable investment that Apple and other multinationals have made in Ireland.

He noted that Apple first invested in Ireland in 1980 at a time of high unemployment and few prospects for growth or development. Since then, Ireland’s business and taxation environment has become “the envy of Europe,” he said in his speech to the Dail.

Sinn Fein, Ireland’s nationalist, left-wing party supports the commission’s findings. There are “not many times I support the EU", Sinn Fein finance spokesman Pearce Doherty told EUobserver, but these were “clearly dodgy deals”, he said of the relationship between Apple and successive Irish administrations.

He wondered how prime minister Enda Kenny could “go after” people who haven’t paid their water charges, referring to speculation as to whether the state was prepared to take citizens to court for unpaid bills.

"How can the government pursue people for a €300 water bill, yet say to them: 'We’re going to spend hundreds of thousands of euros on lawyers to ensure we don’t take money from Apple'?,” Doherty asked.

'Pocket money'

Water charges were introduced in Ireland in early 2015 by then Fine Gael/Labour coalition. It was one of the most unpopular decisions imposed by that administration and triggered a series of large-scale, nation-wide protests.

Doherty says Sinn Fein’s policy is that the money should be used for much-needed capital investment, and to pay salaries of nurses, teachers and police, instead of borrowing the money for these on financial markets.

Meanwhile, Irish charities, whose services have been in huge demand in recent years as people battled with high unemployment, social housing shortages, and continuous rises in extreme poverty rates, say the government should accept the money from Apple and support those most in need.

At a time when “homelessness is out of control”, the money would “go a very long way”, Father McVerry told EUobserver.

He said €13 billion amounts to mere “pocket money” for Apple, but could be put to very good use by charities and local authorities.

McVerry added that while he understands the government wishes to protect its reputation from accusations that it allowed unlawful state support to one corporation over another, the situation “reflects the fact that those who are wealthy and powerful are untouchable.”

'Shattered' reputation

Even if Apple’s tax activity in Ireland is legal, it is not “moral”, McVerry said. “This is what got us in to recession in 2008.”

Ireland’s international reputation is now “shattered”, regardless of the outcome of the appeal, because it is clear the government is colluding with Apple to ensure they pay little tax, says McVerry.

He also said it will be “hard” for government to pursue water tax defaulters - the people who refused to register to pay for water services when the facility ceased being free.

A march against water charges organised to take place on 17 September will now also protest against the Apple appeal.

And although the commission’s decision is against a multinational in favour of a member state, it has not necessarily improved the image of the EU amongst protesters.

“I don’t feel that the EU is defending Irish taxpayers,” Ken Purcell a leader of the anti-water charges protest movement - a potent anti-establishment force that largely led to the collapse of the vote for the Fine Gael/Labour coalition in February’s general election, told this website.

'Put Irish people first'

Purcell also believes that now is the “right time” for Ireland to consider a referendum on EU membership.

“Europe has been dictating to our government all along” which has led to years of inequality and austerity, he said, adding that Ireland “need[s] a new system - far away from the EU”.

Although when pressed, anti-poverty charities are against the government’s bid to refute the findings of the EU ruling, none is actively campaigning.

“It’s in the political arena and the society wouldn’t make a statement”, says Jim Walsh from the St Vincent de Paul, one of the largest, longest-serving Irish charities for the poor and disadvantaged. But he said they would definitely find “good use for the money” and believe the government “should take it.”

Some 10,000 signatures calling on the government to halt its decision against the commission’s ruling were also gathered by a non-aligned digital campaign group, called Uplift, in 24 hours.

Its spokesperson, Emily Duffy, says the government has a “moral obligation to put Irish people first.”

EU tax haven list could name US

The EU commission plans to name and shame foreign tax havens in a new list, but will EU capitals keep their friends, such as the US, out of the register?

EU states warm to tax avoidance measures

In the wake of Apple's record-breaking tax bill, EU finance ministers are giving more support to the idea of strengthening corporate tax legislation.

German ministries were at war over CO2 car cuts

Foreign minister Sigmar Gabriel was not the only German government official trying to water down an EU draft bill on CO2 emissions from passenger vehicles last year. In fact, three Berlin ministries were contradicting each other behind the scenes.

News in Brief

  1. Sweden emerges as possible US-North Korean summit host
  2. Google accused of paying academics backing its policies
  3. New interior minister: 'Islam doesn't belong to Germany'
  4. Hamburg 'dieselgate' driver wins case to get new VW car
  5. Slovak deputy PM asked to form new government
  6. US, Germany, France condemn 'assault on UK sovereignty'
  7. MEPs accept Amsterdam as seat for EU medicines agency
  8. Auditors: EU farm 'simplification' made subsidies more complex

Stakeholders' Highlights

  1. Counter BalanceConmtroversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  2. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds
  3. Macedonian Human Rights MovementMeets with US Congress Member to Denounce Anti-Macedonian Name Negotiations
  4. Martens CentreEuropean Defence Union: Time to Aim High?
  5. UNESDAWatch UNESDA’s President Toast Its 60th Anniversary Year
  6. AJC Transatlantic InstituteAJC Condemns MEP Ana Gomes’s Anti-Semitic Remark, Calls for Disciplinary Action
  7. EPSUEU Commissioners Deny 9.8 Million Workers Legal Minimum Standards on Information Rights
  8. ACCAAppropriate Risk Management is Crucial for Effective Strategic Leadership
  9. EPSUWill the Circular Economy be an Economy With no Workers?
  10. European Jewish CongressThe 2018 European Medal of Tolerance Goes to Prince Albert II of Monaco
  11. FiscalNoteGlobal Policy Trends: What to Watch in 2018
  12. Human Rights and Democracy NetworkPromoting Human Rights and Democracy in the Next Eu Multiannual Financial Framework

Latest News

  1. Brexit and trade will top This WEEK
  2. Dutch MPs in plan to shut EU website on Russian propaganda
  3. Four years on – but we will not forget illegally-occupied Crimea
  4. Evacuated women from Libya arrive newly-pregnant
  5. Merkel in Paris for eurozone reform talks
  6. Commission rejects ombudsman criticism over Barroso case
  7. Western allies back UK amid Russian media blitz
  8. Meet the European Parliament's twittersphere

Stakeholders' Highlights

  1. Mission of China to the EUDigital Cooperation a Priority for China-EU Relations
  2. ECTACompetition must prevail in the quest for telecoms investment
  3. European Friends of ArmeniaTaking Stock of 30 Years of EU Policy on the Nagorno-Karabakh Conflict: How Can the EU Contribute to Peace?
  4. ILGA EuropeCongratulations Finland!
  5. EUobserverNow Hiring! Sales Associate With 2+ Years Experience
  6. EUobserverNow Hiring! Finance Officer With Accounting Degree or Experience
  7. UNICEFCyclone Season Looms Over 720,000 Rohingya Children in Myanmar & Bangladesh
  8. European Gaming & Betting AssociationEU Court: EU Commission Correct to Issue Guidelines for Online Gambling Services
  9. Mission of China to the EUChina Hopes for More Exchanges With Nordic, Baltic Countries
  10. Macedonian Human Rights MovementCondemns Facebook for Actively Promoting Anti-Macedonian Racism
  11. Nordic Council of MinistersGlobal Seed Vault: Gene Banks Gather to Celebrate 1 Million Seed Collections
  12. CECEIndustry Stakeholders Are Ready to Take the Lead in Digital Construction

Stakeholders' Highlights

  1. ILGA EuropeAnkara Ban on LGBTI Events Continues as Turkish Courts Reject NGO Appeals
  2. Aid & Trade LondonJoin Thousands of Stakeholders of the Global Aid Industry at Aid & Trade London
  3. Macedonian Human Rights MovementEuropean Free Alliance Joins MHRMI to End the Anti-Macedonian Name Negotiations
  4. Mission of China to the EUChina-EU Tourism Year to Promote Business and Mutual Ties
  5. European Jewish CongressAt “An End to Antisemitism!” Conference, Dr. Kantor Calls for Ambitious Solutions
  6. UNESDAA Year Ago UNESDA Members Pledged to Reduce Added Sugars in Soft Drinks by 10%
  7. International Partnership for Human RightsUzbekistan: Investigate Torture of Journalist
  8. UNICEFExecutive Director's Committment to Tackling Sexual Exploitation and Abuse of Children
  9. Nordic Council of MinistersState of the Nordic Region 2018: Facts, Figures and Rankings of the 74 Regions
  10. Mission of China to the EUDigital Economy Shaping China's Future, Over 30% of GDP
  11. Macedonian Human Rights MovementSuing the Governments of Macedonia and Greece for Changing Macedonia's Name
  12. Swedish EnterprisesHarnessing Globalization- at What Cost? Keynote Speaker Commissioner Malmström