Cabinet split on appeal of Apple tax ruling

The Government is split over plans to appeal the European Commission ruling that technology giant Apple owes the State €13bn in tax amid a growing public backlash over the position.

Cabinet split on appeal of Apple tax ruling

Finance Minister Michael Noonan is to seek formal support from Government effectively decline the lucrative windfall and to appeal the decision to the European courts at an emergency cabinet meeting today.

However, amid growing public anger over the Fine Gael plan to refuse the money, the Independent Alliance has warned it wants to examine all options, including forcing Apple to pay the funds back in full.

In a landmark ruling following a three-year investigation, the European Commission yesterday said technology giant Apple owes Ireland €13bn in unpaid taxes over the past decade.

Speaking in Brussels, European Commissioner for Competition Margrethe Vestager said the maker of the popular iPad and iPhone products paid just 1% on tax on its European profits in 2003 and a minuscule 0.005% in 2014 due to a complex set of ‘sweetheart deals’ involving the Irish tax system.

EU Competition Commissioner Margrethe Vestager.
EU Competition Commissioner Margrethe Vestager.

Ms Vestager said the situation — which has been traced back to two legal tax initiatives for Apple in 1991 and 2007 — means it is paying less than €50 in tax on every €1m of profit.

As Apple’s headquarters outside of the US is based in Cork City, Ms Vestager said the European Commission has concluded the company owes this country €13bn in unpaid taxes which must be repaid immediately.

Despite initial Government claims to the contrary, she said Ireland is free to use this money on public services — and it is not limited to repaying the national debt — and other nations which believe they are owed funds may also benefit.

However, despite the seemingly positive news, Fine Gael yesterday denounced the decision to give this country €13bn and warned Government is, like Apple, planning an appeal which could take four years.

In a strongly worded statement after the European Commission announcement, the Department of Finance said it “disagrees profoundly” with the ruling and stressed “Ireland did not give favourable tax treatment to Apple”.

Finance Minister Michael Noonan repeated the comment yesterday, saying “this isn’t a moral issue” and that he plans to seek Cabinet approval today to appeal the commission decision.

The Fine Gael position is based on the fact accepting the €13bn in tax would mean Ireland agrees it is a tax haven and would potentially risk the near 6,000 Apple jobs and 360,000 multinational jobs in this country.

However, despite the argument, Government partner the Independent Alliance is strongly opposed to any appeal on the money and is seeking its own independent advice before today’s Cabinet meeting.

Meanwhile, Sinn Féin finance spokesperson Pearse Doherty yesterday called for a vote on the appeal when the Dáil returns and a “public inquiry” into whether other multinationals have benefited from “tax avoidance” deals.

While the Social Democrats’ Catherine Murphy said it would be “totally intolerable” to challenge the ruling, Labour, and Fianna Fáil said the decision needs to be appealed to clarify the situation.

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