Ireland suffered reputational damage from €13bn Apple tax case says Donohoe

Ireland suffered reputational damage from €13bn Apple tax case says Donohoe
The Apple tax case did"significant" reputational damage to Ireland, finance minister Paschal Donohoe has said.

Ireland has suffered “significant” reputational damage due to the €13bn Apple tax case, according to finance minister, Paschal Donohoe.

Corporate tax changes globally will have “repercussions” for the country’s 12.5% rate, he added.

Speaking on a PwC Ireland webinar, Mr Donohoe claimed that while Ireland was vindicated in appealing a 2016 European Commission finding that Apple had received State aid and preferential treatment, it has taken its toll politically.

The European General Court overturned the fine, finding that there was no State aid for Apple given by Ireland through selective tax preferential treatment.

“Of course, the political challenges that the decision created for us, the great reputational difficulties it created for Ireland in recent years, mean that while there was a lot of solace in seeing our position vindicated, on the other hand, the effect it has had on us, the effect on our reputation has been very, very significant over the last number of years," Minister Donohoe said.

“You just have to acknowledge that. You have to be honest in acknowledging it, and try to use the ruling that was secured by our team as a foundation then for pointing to the huge change that we have made here in Ireland, and the huge work we have done in our corporate tax code.” 

Mr Donohoe said he will, after next month, be meeting EU commissioner Margrethe Vestager, the bloc’s competition enforcer who ruled against Ireland in the first instance, saying it “granted illegal tax benefits to Apple".

 Minister for Finance Paschal Donohoe TD arriving for the Cabinet Meeting in Dublin Castle this afternoon. Picture: Stephen Collins /Collins Photos Dublin
 Minister for Finance Paschal Donohoe TD arriving for the Cabinet Meeting in Dublin Castle this afternoon. Picture: Stephen Collins /Collins Photos Dublin

He struck a conciliatory tone, saying he has “an awful lot of respect for what she is doing” but acknowledged that Ireland’s corporation tax regime will continue to be scrutinised.

Global changes in the way firms pay tax are coming, which will have an impact on Ireland, he said: “We have to find ways in which we can continue to make progress on an agenda that is not going away while respecting the rights of small countries to find ways in which they can be competitive."

“This agenda is not going away, big changes are coming in corporate tax globally. They are going to be happening, they are going to have repercussions for Ireland. 

This Government will need to work with all of our economy to find a pathway through all of that. Change is coming and we will have to make decisions in the coming years in relation to this agenda.” 

Mr Donohoe claimed that Ireland has done a “remarkable” job in relation to the Covid-19 pandemic, and that we are well prepared if a second wave happens. Ireland has built up a bank of expertise that could be utilised if the second wave happens, he said.

While hundreds of grieving families deserve the utmost sympathy, Ireland’s approach to handling the pandemic has been a remarkable success, he said.

Minister Donohoe said he and Public Expenditure Minister, Michael McGrath, have "reasonably good ideas" around the parameters of October's Budget. He said he wants the term 'fiscal space' to be consigned to the political and economic graveyard, adding that it is no longer relevant in a new Budgetary cycle in the context of post-Covid recovery.

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