State may not get any Apple tax haul

The Irish exchequer could lose out on millions of euro from Apple if a proposal massively backed by MEPs in the European Parliament is adopted by the European Commission.

Irish MEPs did not have an opportunity to vote against the specific proposal as it was part of a comprehensive report on the commission’s annual competition report for 2014 but two Sinn Féin and one Independent abstained in the overall vote.

The commission is investigating whether an agreement on tax liability between the Revenue Commissioners and the world’s wealthiest technology company, Apple, amounted to illegal state aid.

The commission has already found that tax deals concluded by Luxembourg with Fiat Finance, by Starbucks with the Netherlands, and by 35 companies with Belgium, were illegal and has ordered them to repay millions of euro-worth of tax to the states.

The annual report, that received the support of almost 80% of MEPs, calls on the commission to change the rules immediately so that amounts to be recovered should go to member states that have suffered an erosion of their tax bases because of the illegal tax arrangement, or it should go to the EU budget and not to the country that granted the illegal tax aid.

“This rule provides an additional incentive for tax dodging” the report said.

Its author, Werner Langen a member of the EPP group to which Fine Gael belongs, told the parliament “countries that play unfair tricks must not profit twice”.

MEP Brian Hayes said the four Fine Gael MEPs were opposed to the idea but there was not a specific vote on that.

“The rest of the report was okay, but this idea that a tax rebate is going to be handed into an EU budget is Alice in Wonderland stuff. It’s going nowhere really”.

The four abstained on proposals in the report that favoured a common consolidated corporate tax base.

Sean Kelly, FG MEP for Ireland South, said they went against the decision of the EPP group and abstained.

The report also called for persons, such as CEOs of companies, to be personally fined as well as their companies in cartel and other cases.

They want new criteria for assessing market size for digital market mergers and acquisitions.

The turnover criteria is not sufficient to judge whether mergers or takeovers lead to too-dominant market positions.

The report cited the case of Facebook’s takeover of WhatsApp to illustrate that firms with low turnovers and substantial start-up losses may have large consumer bases and so big databases and strong market positions.


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