Ireland will lose Apple tax case, warns expert

Ireland is set to lose the Apple tax case brought by the European Commission that alleges the State cut some sort of sweetheart deal with the tech giant, a leading expert has warned.

Seamus Coffey, an economist at University College Cork who has written reports for the Department of Finance, said the judgment will be tightly worded and that Ireland will not be expected to collect anywhere near the €8bn in back taxes from Apple that some analysts have suggested.

Speaking in a personal capacity and not on behalf of the Irish Fiscal Advisory Council, of which he is a member, Mr Coffey said the tax bill will likely be small, possibly only as much as €150m. It will relate solely to taxes due in Ireland over the last decade, he said.

He said the judgment will likely see Ireland avoid any new furore from the US during the presidential election.

“There shouldn’t be an adverse finding, but it is likely that there will be,” said Mr Coffey, adding that Apple pays tax in Ireland based on the key support, procurement, and logistics which its 6,000 staff here provide the global giant.

“They will make a judgment on what corporation tax Apple pays in Ireland and not judge that Apple’s global profits are taxable in Ireland.”

Even if the judgment were to find Apple owed €10m-€15m in back tax for each of the past 10 years, the overall bill would still likely add up to €150m — a fraction of the €6.87bn the State collected in all corporate taxes last year.

“I don’t think they will get anywhere near €1bn [from Apple],” said Mr Coffey.

Other countries the commission ruled collected too little tax from US and EU companies said they will appeal their adverse rulings.

Mr Coffey thought it likely Ireland would appeal any adverse ruling.

Ireland’s tax regime has faced more scrutiny than other countries. In recent months, the frontrunners in the race for the White House have slammed Ireland over so-called tax inversion deals whereby US multinationals flip their corporate residency into Ireland seeking more favourable tax treatments.

Ireland’s alleged dealings with Apple came under fierce scrutiny and raised unwelcome headlines when a Senate sub-committee committee in May 2013 claimed US taxpayers were losing billions of dollars in global revenues generated by Apple.

At the same hearing, Apple chief executive Tim Cook said it was the 35% corporate tax rate levied in the US that was the source of the problem and that Apple had a substantial number of employees and resources based in Ireland.

Finance Minister Michael Noonan said before the start of the general election campaign that he expected the commission to announce its decision after the vote.


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