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'A bad day for the taxpayer': Opposition TDs accuse government of 'throwing away' Apple's €13 billion

Apple and Ireland won their appeal against the European Commission’s €13 billion tax ruling.

Sinn Féin's Pearse Doherty has said today is a bad day for taxpayers.
Sinn Féin's Pearse Doherty has said today is a bad day for taxpayers.
Image: Leah Farrell/RollingNews.ie

AS THE GOVERNMENT claims the court decision today in favour of Ireland and Apple as a win, opposition politicians and business groups have questioned what it means for transparency and fairness in the country’s tax system.

The General Court of the European Union ruled in favour of Ireland and Apple in their appeal against the European Commission’s finding that the country breached state aid rules in its dealings with the multinational.

The European Commission previously ordered the US company to hand back €13 billion in unpaid tax and over €1 billion in interest payments to the Irish government.

The Department of Finance today said the decision showed there had been “no special treatment” for the tech giant. Speaking to RTÉ’s Today with Sarah McInerney, junior minister and Fine Gael TD Colm Brophy also welcomed the decision which he said was a vindication of the Irish government’s position.

“I think that is a very very welcome decision in terms of the clarity it should give right across the board for all businesses in our country paying taxes and also the vindication that the government was correct in the position that it took.”

Tweet by @Charlie Flanagan Source: Charlie Flanagan/Twitter

However Sinn Féin’s finance spokesperson Pearse Doherty said today is “a bad day for the taxpayer”.

“The Department of Finance may be thinking that this is a good day for themselves. Morally, this is a terrible day, the fact that the richest company in the world was able to generate over €100 billion of profits and not pay tax anywhere in the world on those profits despite the fact that the way the companies are incorporated here in Ireland.”

He rejected the suggestion that if the government had lost the case today it would have struck a blow to the sovereignty of Irish states and discourage foreign direct investment in Ireland.

“The 12.5% [corporation tax] rate isn’t at question here and it’s not about the sovereignty of the Irish tax code that’s at question here. This is about State aid that was before the courts, and indeed the European Commission in the past has ruled against Ireland as a result of State aid and we just sucked it up and dealt with it we didn’t appeal it.

“Every year when we deal with the Finance Bill we need approval in terms of State aid for a number of our tax codes, for example when we bring in taxes that support farmers, it needs State aid approval. So this is a common thing that’s going back for many, many years.”

Doherty said it is “unacceptable” that small and medium companies are being asked to pay 12.5% tax on their profits when the wealthiest country in the world was not.

“Remember what’s at the core here and what Colm Brophy and others are now suggesting that the law is that Apple’s taxation rate was 0.005%,” he said.

“That means that for every €1 million of profits that they made, the law in Ireland allowed them to pay €50 of tax. I’m sure that for many corner shops, many hairdressers, many other businesses who are paying tax at the appropriate rate that will be a red rag to them that it was allowed.”

People Before Profit TD Richard Boyd Barrett said the government should “hang their heads in shame for aiding and abetting Apple’s tax dodging”. He accused the government of having “thrown away” €13 billion which is needed to help the economy to bounce back.

“That money, which is so desperately needed, could have been put to use in mitigating the Covid-19 crisis which is having such a massive impact on our economy and society,” he said.

“The question should be put to the Green Party TDs if they are happy to stand over a regime that looks to prop up the tax avoidance strategies of some of the wealthiest companies in the world, thus denying our public services like hospitals, schools and infrastructure from desperately needed revenue.”

Ibec, the group that represents Irish business has noted the outcome of today’s proceedings. Its CEO Danny McCoy said:

We want Ireland to be the best place in the world as a business location. As such, it is crucial for all businesses, multinational and indigenous, that Ireland’s tax system is, and is seen to be, transparent and equitable.

Also speaking to RTÉ, Green Party TD Neasa Hourigan said the decision is a blow to the EU Commission in terms of its development of tax policy and is likely to be appealed to the European Court of Justice. She said this was “quite a technical case” and the Commission had not been able to “deliver the burden of proof”.

Hourigan said that in general the government should be pursuing corporations to ensure they are paying “their fair share”.

She pointed out that the State has already spent millions on legal fees in this case. “I think we do need to start to think about whether the best interests of Apple are fully aligned with the best interests of the State,” she said.

Vice President of the European Commission Margrethe Vestager said the judgement will now be carefully studied as the Commission reflects on possible next steps. 

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She said the Commission “fully stands behind the objective that all companies should pay their fair share of tax”. 

“If member states give certain multinational companies tax advantages not available to their rivals, this harms fair competition in the EU. It also deprives the public purse and citizens of funds for much needed investments – the need for which is even more acute during times of crisis.”

Corporate tax avoidance

Following the ruling, Oxfam called on the Irish government to “urgently address continued and extreme corporate tax avoidance”.

 A recent Oxfam review of the EU Tax Haven List showed that royalty payments sent out of Ireland amounted to more than are sent out of the rest of the EU combined.

“These repeated cases of tax avoidance point to the need for more fundamental tax reforms at EU and global level,” said Michael McCarthy Flynn, Oxfam Ireland’s senior policy and research coordinator.

“These include a digital service tax, a minimum effective tax rate, effective measures against tax havens and new rules that require companies to disclose where they generate their profits and where they pay their taxes, for each country they operate in. This would give governments and civil society the ability to hold companies to account.”

“In the wake of COVID-19 and the devastating economic fallout already being felt, governments must not continue to spurn the chance to raise vital revenue in corporate tax income for the benefit of their citizens,” he said.

“Corporate tax avoidance costs governments hundreds of billions of euros every year – money that could be used to deliver essential services, such as health and child care, which are even more critical in the wake of the global pandemic.”

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