Michael Noonan: Apple tax verdict may come in July

The European Commission may deliver its verdict on Apple’s tax arrangements in Ireland as soon as next month, according to Finance Minister Michael Noonan, offering the first clues to a firm timeline for a decision.

European authorities opened the probe in 2014, and in preliminary findings, said Apple’s tax arrangements were improperly designed to give the company a financial boost in exchange for jobs in Ireland.

“The speculation now is that the commission may make a decision sometime in July,” Mr Noonan said in an interview in Luxembourg yesterday.

“But we don’t know that with certainty. It’s the general feel around Brussels that they’re walking toward a July decision,” Mr Noonan added.

Ireland will fight any negative commission decision to the EU courts, Mr Noonan said.

The Government will “vigorously defend” any adverse Apple tax decision, he has said previously.

The EU has gathered information on hundreds of companies and their agreements with national authorities as part of a clampdown on sweetheart tax deals that may be illegal state aid.

While the commission continued its probe after its preliminary findings, asking for more detailed documentation, Irish authorities continue to expect a negative finding.

That sense was likely heightened by three decisions since October, where the EU ruled that other governments elsewhere in the region had illegally provided aid to companies.

In a worst-case scenario, Apple may face a €17bn bill if the government ultimately loses and is forced to recoup tax from the company, according to JPMorgan Chase analyst Rod Hall.

Matt Larson of Bloomberg Intelligence puts the figure at more than $8bn (€7bn).

Brussels lawyers speculate that the final amount could be much less, in the hundreds of millions range — large enough to send a message to companies like Apple and the countries that dole out tax breaks, but not too large to risk creating havoc in case the decisions get overturned in the EU courts.

The reality is that nobody knows for sure, and it’s worth noting that the re- payment orders in other state aid cases have been relatively small.

The commission in January ordered Belgium to recover about €700m in illegal tax breaks to at least 35 companies, including Anheuser-Busch InBev and BP.

Last year, Starbucks was ordered to pay just €30m in back taxes to the Dutch government.

While Ireland notionally stands to get the cash, the bigger picture is a negative decision would hurt the country’s reputation and create uncertainty around its tax offering, which has been a key factor in attracting foreign direct investment.

Given that Apple employs about 5,500 people in Ireland and the country is so reliant on US investment, the Government can ill-afford not to be seen to stand shoulder-to-shoulder with Apple.

Ireland could be sitting on the cash for “several years,” according to briefing notes, indicating that the money will move from Apple’s bank account to Ireland’s while lawyers make millions arguing over the decision.

The EU’s decision will only be the end of the beginning, rather than the beginning of the end.


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