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Margrethe Vestager is greeted by Finance Minister Michael Noonan in Dublin Castle in 2013. AP/Press Association Images
sweetheart deal

Government to appeal this week's EU decision to force Apple to pay up to €19 billion in back taxes

The EU is to rule this week that Apple got a special tax deal in Ireland over a period spanning from 1991 to 2007.

THE GOVERNMENT WILL appeal this week’s European Commission decision on Apple’s tax arrangements with Ireland, which could bring a tax windfall of up to €19 billion.

The Revenue Commissioners are expected to raise a tax assessment on the multinational giant following the decision, expected in the coming days, that Ireland broke EU state aid rules by offering Apple special tax arrangements.

The windfall for the exchequer could amount to anything from hundreds of millions of euro to €19 billion – but the Irish government is going to appeal the ruling, as they insist Ireland did not offer Apple a special sweetheart deal.

The EU is expected to hand Ireland a figure for the tax bill, though it’s understood the exact amount will be down to Revenue to calculate.

The European Commission is looking at whether Apple got a sweetheart tax deal in Ireland over a period spanning from 1991 to 2007. It has already made preliminary findings that Irish officials gave Apple a “selective” advantage in its tax dealings.

“Nothing is known until a decision is taken,” Fine Gael MEP Brian Hayes told this morning.

If the decision goes against Ireland, the question is will it be a rap across the knuckles or is it a more substantial tax call [for Apple].

“One back of the envelope assessment showed 19 billion would be owed, but that is absolutely crackers.

Europe US Tax Probes An Apple store in New York. Mark Lennihan Mark Lennihan

“There’s an expected decision this week… I believe it’s due in the next few days, yes.

The government has said they’re going to appeal it to the ECJ. That could take three years. That’s where we are on this.

“None of these things help in terms of our international reputation, but I think Michael Noonan is right to appeal the decision. A lot of the Commission assessment is based on supposition.”

Hayes also pointed out that Luxembourg appealed the Starbucks and Fiat cases, and Spain appealed an EU decision involving Bank Santander.

Apple’s tax bill could be to pay 10 years of back-taxes to Revenue, who may hold the tax bill in an ‘escrow account’, a sort of halfway house, pending the appeals of the EU by the Government and Apple.

Last month, Margaret Vestager, the European Commissioner for Competition, told the Minister for Finance that she expected to formally deliver the finding in September or October, possibly after the Budget.

This week’s ruling thus poses a political headache for the minority Coalition, as members from the Independent Alliance may argue for any ‘Apple money’ to be spent on public services.

The EU Commission’s decision, due this week, comes almost two years after the initial preliminary finding that illegal state aid was given to Apple by the Irish government between 1991 and 2007.

JP Morgan had previously warned that Apple’s tax bill could amount to €19 billion.

“Many of these issues are legacy issues,” Hayes said.

“Noonan got rid of the double Irish, he changed the legacy rules, he implemented all of the OECD processes, and we’ve doubled the amount we’ve taken in on corporation tax as a result.

The loopholes are no longer there.

“I think the Commission would be quite happy if these cases were appealed to the ECJ, as they are not completely sure of their ground.”

Read: Europe accused of ‘undermining the global tax system’ as Apple faces billions in Irish back-taxes

Read: Boost for the Leitrim as over 150 jobs announced

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