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Dáil approves government plan to appeal Apple tax ruling

The Taoiseach said it’s not true Apple was provided with more favourable treatment than others companies in terms of taxes.

Updated 9.40pm

enda Enda Kenny Source: Oireachtas.ie

THE GOVERNMENT HAS won its motion to appeal the Apple tax ruling.

The Dáil voted 93 votes to 36 to appeal the ruling by the European Commission that the tech giant should pay €13 billion in back taxes.

The first of several motions was a counter-motion from Sinn Féin, which was defeated by 28 votes to 104.

The second counter-motion to be voted on was from TDs Clare Daly, Mick Wallace, Thomas Pringle, Thomas Broughan, Maureen O’Sullivan and Joan Collins. This was defeated by 16 to 98.

It called on the Dáil to support the European Commission deal and to make public details of similar deals.

The third amendment, from Deputy Catherine Murphy and Roisin Shortall from the Social Democrats – which lost member Stephen Donnelly this week – is currently being voted on.

A fourth amendment, from Labour was defeated, while an amendment from the AAA-PBP is currently being debated.

A protest took place outside the Dáil today by people opposed to the government’s decision to appeal the ruling.

7/9/2016. Apple Billions Protest. Protesters at a Protesters at a meeting organised by the Anti Austerity Alliance (AAA), outside the Dail (Leinster House) today. Source: Eamonn Farrell

Debate

Earlier today, opposition TDs hit hit out at the fact they have not seen the European Commission (EC) ruling ordering Ireland to recover €13 billion in back taxes from Apple ahead of today’s Dáil debate.

The lower house was recalled early to discuss the issue.

TDs have not seen the confidential 150-page ruling, but the Department of Finance sent deputies a 16-page document last night about the commission’s decision.

Dáil members are being asked to vote on the following motion:

DAIL Government motion Source: Finance Press Office

Speaking in the Dáil earlier this evening, Finance Minister Michael Noonan said that grounds for appeal will be given to the Attorney General. He also said that there are “indications already of support” from other countries who are making state aid appeals.

Regarding the money that the EC has ordered Apple to pay back to Ireland, he said that Ireland would be restricted in what it can do with it.

“If this were available to spend, it would be regarded as windfall,” said Noonan of the €13bn sum. “Fiscal rules say that you cannot spend it for ongoing expenditure so in other words in our language, you can’t use it for current expenditure.”

You could use it for debt reduction and in theory you could use it for capital projects but because it would be likely to accrue to the exchequer in one year, your capacity to spend would be caught in the fiscal rules and we’d be back in the fiscal space and you wouldn’t have fiscal space to accommodate it so the amount you could spend on capital projects would be quite restricted.

Independent members of Cabinet demanded a Dáil debate on the issue last week in return for their support to appeal the commission’s ruling.

Anti-Austerity Alliance/People Before Profit (AAA/PBP) TD Richard Boyd Barrett said today’s discussion is “a sham debate”, describing as “absolutely unbelievable” that TDs have to vote on the issue without access to the ruling.

rbb Richard Boyd Barrett Source: Oireachtas.ie

Speaking to reporters prior to the debate, Boyd Barrett said: “We need to pursue the other companies who undoubtedly owe billions in unpaid tax as well and who also availed of these tax loopholes.”

Independent TD Thomas Pringle echoed Boyd Barrett’s sentiment, asking the Taoiseach if it would have not made more sense to debate the issue before the decision was made, rather than after Cabinet approval last week.

In response, Enda Kenny said the Cabinet has a mandate to make a decision and then seek Dáil approval. He said it is up to the EC as to when the report will be published.

pringle Thomas Pringle Source: Oireachtas.ie

Last week, the EC ruled that Ireland gave the tech giant illegal state aid worth up to €13 billion over more than 10 years.

Kenny said the commission’s decision is “so profoundly wrong and damaging that it demands an immediate, clear and strong response”.

Governments over the years have made clear, as this Government has, that Ireland did not and does not do deals with corporates, large or small. It is not how we do business.

“It is not true that Apple was provided with more favourable treatment than others. There was no preference shown. The law was applied fully and appropriately, and Apple paid its taxes due in Ireland.

“We will appeal this decision with the strongest possible assurances from the Revenue Commissioners that there was no departure from applicable Irish law, that there was no preference shown in applying that law, and that the full tax was paid in accordance with the law.

It is important to us that businesses and investors should have confidence and certainty in the rules that apply and in how they will be taxed. Ireland offers that certainty in the way we treat all companies fairly and equally.

“The commission’s decision has done great damage to that goal, and not just in Ireland’s case.

“If the situation in Europe is to be that tax rulings can be revisited and set aside by the commission even decades after the event, investors will simply not know where they stand when they locate in Europe.”

noonan Michael Noonan Source: Oireachtas.ie

Kenny then spoke about “the long, productive and overwhelmingly positive relationship Ireland has enjoyed with Apple”.

“Apple first came to Ireland in 1980 – just three years after it was incorporated in the US – and began making personal computers in Cork. Within 10 years of its arrival, it employed more than 1,000 people.

When its latest round of investment is complete, Apple will employ 6,000 people in Ireland. We are delighted that Apple chose Ireland, and delighted that it chose to stick with Ireland. It is a tribute in no small part to the dedication and excellence of the people who have worked with it and for it.

“Apple is a welcome and valued part of the community in Ireland – and not just the business community. I look forward to this long remaining the case.”

‘Broken’ system

Minister Noonan told the Dáil the commission’s decision marks a “landmark” moment for Ireland’s tax policy.

Noonan said Ireland has “consistently attained high international ratings on transparency” and has been an “early adopter of many new reforms” at international levels.

He said the “broken” international tax system allows some companies to pay low levels of tax.

mcgrath Michael McGrath Source: Oireachtas.ie

Noonan said EU member states have sovereignty when it comes to setting their tax rate, again reiterating Ireland’s tax system, in particular the 12.5% corporation tax rate, is vital in creating jobs here.

The minister said the ruling could have serious serious consequences for Ireland, adding that it’s “very damning for our reputation to be called into question”.

Fianna Fáil’s finance spokesperson Michael McGrath said people need to look beyond the “dramatic headlines” about the ruling, adding it would be naive to believe that €13 billion is ready for Ireland to spend as we please if we just ask for it.

He said companies based here should, and do, pay the 12.5% corporation tax rate.

McGrath added that Ireland’s corporation tax regime has led to a lot of investment here and has “been targeted by Europe on several occasions and in several guises”.

mm Micheál Martin Source: Oireachtas.ie

Fianna Fáil leader Micheál Martin said: “We continually hear the incorrect claim that what we are talking about is the opportunity to grab a large pot of money for the Irish Exchequer.

“This is a complete distortion of a situation which in reality poses a potential threat to the long-term maintenance of employment and funding of public services.

“It is a clear and present threat to Irish workers in the private sector and the funding they generate for services we all rely on.”

‘Embarrassing’

Sinn Féin’s finance spokesperson Pearse Doherty said it’s “embarrassing for us that the commission had to carry out this investigation”.

He said when he raised the issue in the past he was “treated like a nuisance” and “shouted down by people who are now ministers”.

Doherty said the state has “had its head in the sand when it comes to tax transparency and fairness” for years.

pearse Pearse Doherty Source: Oireachtas.ie

He accused Fine Gael and Fianna Fáil of using “every excuse under the sun” to defend the appeal.

Doherty said the €13 billion is “our money” and it is wrong for people to spread “misinformation that it’s some kind of magic money that is not ours”.

He said it is unfair to describe the commission’s decision as a “power grab by Brussels” or “jealousy” from other countries about the amount of foreign direct investment we receive.

Doherty added it is “a cynical lie to suggest there is any new threat to our corporation tax rate”, claiming jobs are not at risk.

Damaged reputation 

Doherty said the appeal will not restore any of Ireland’s damaged reputation, adding the only people who will benefit are lawyers, who “stand to gain millions, while the Irish people lose billions”.

He called for a public inquiry to be established into Ireland’s tax system and other money the state may be owed.

“Tax is not just for the small man, it is also for the big companies and small companies,” Doherty said.

gerry Gerry Adams Source: Oireachtas.ie

Sinn Féin leader Gerry Adams accused the Government, Fianna Fáil and Labour of hypocrisy, saying: “What’s a few billion between friends?”

He said the back taxes could be used to help address a number of issues, including homelessness and supporting the elderly.

“It has as much credibility as a heap of horse manure,” Adams said of the appeal.

Labour

Labour leader Brendan Howlin said his party is tabling some amendments to the motion but “supports in principle the decision of the Government to appeal this case”.

“At one level, it has not been an easy position to reach. The prospect of an additional 13 plus billion of revenue is certainly an attractive one. But in reality that is all it is – a prospect. This case will be appealed by the Apple. It will be determined by the European courts.

howlin Brendan Howlin Source: Oireachtas.ie

“And it is simply nonsensical to suggest that we should not be party to an appeal while the reputation of one of the most important agencies of state is under review.

“Frankly, the easy thing for my party to do would be to take a populist line, but it wouldn’t be right and it wouldn’t be in our country’s long term national interest.”

No rush

The former member of the Social Democrats Stephen Donnelly (who was sitting at a distance to his former colleagues today) said he will be abstaining from tonight’s vote.

It is clear that Ireland’s tax laws have facilitated very large and unwelcome tax avoidance. It is also likely, however, that Ireland would receive a very small portion of the €13 billion, plus interest, that is on the table. We are being asked to discuss very complex issues involving large amounts of money as well as international relations without the information we need.
The Belgian government took two months before it launched an appeal in a similar situation. We have two months left before we need to lodge an appeal.There is no need for us to proceed right now. We have two months to discuss this in detail and that is what we should do. On that basis I will be abstaining from the vote tonight.

07/09/2016. Donald Tusk - Government Buildings. Pi An Taoiseach Enda Kenny TD after meeting President of the European Council Donald Tusk at Government Buildings. Source: Sam Boal

Taoiseach Enda Kenny also met with the European Council President Donald Tusk in Government Buildings this afternoon.

Tusk said Kenny explained the reasons why the Irish government have chosen to appeal the European Commission’s ruling. He said he would not comment on the case as it is now “up to the court”.

He said he did not expect Ireland’s taxation to be a major issue at the upcoming EU summit in Bratislava this month.

With additional reporting by Christina Finn and Aoife Barry

Read: Noonan claims Apple ruling an “attack” on Ireland’s corporate tax regime

Read: FactCheck: Is Apple really the “largest taxpayer in Ireland”?

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Órla Ryan

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