Government backs Apple: Appeal is not in long-term best interest

We have a reliable end-of-year choreography. The Rose of Tralee knees-up warns winter cannot be far away; September brings All-Ireland finals and their fevered speculations. Those Croke Park weekends are followed by Listowel Races and the ploughing, the great harvest-time jamboree. Later, the Budget heralds the turning of our year.

Speculation about corner forwards and barley prices is replaced by crystal-ball gazing about how pensioners might fare, tax breaks for housing or, increasingly, carbon taxes. Opposition parties goad governments, suggesting the impossible as an option. Governments try to balance prudence with seducing a fickle electorate, especially if, as is the case today, an election looms. This year budget imaginings are almost low-key. The predictable voices, caught in the Brexit headlights, accept that this year things are different. Indeed, they may be very different and not just because of Borisorama.

Last Tuesday a EU court in Luxembourg began to consider arguments in a case that may have, if not quite as seismic as Brexit, then an economic impact of similar scale. The European Commission ruling from 2016, that Ireland gave tax benefits worth €13bn to Apple, has come to adjudication. According to the EC, Ireland gave inappropriate tax benefits to the tech giant. Tax rulings secured by two Apple entities in this country reduced Apple’s tax bill for more than two decades — to 0.005% in 2014, according to the EC. Apple, unsurprisingly, disputes this. Three years ago the Commission ordered Apple to pay €13bn in taxes it said were owed to Ireland. If the complexities of this case are labyrinthine then the context is not. In a country underpinned by international companies’ taxes, anything that might make this base less attractive is significant.

If that is the simplest analysis then it is also dangerously blinkered. It perpetuates the myth, one of Borisorama scale, that this is not a tax haven. That hands-washing endures despite myriad Central Bank warnings that many of the “shadow banks” based here are not banks but engage in “bank-like activities”. The multinational assets they hold dwarf the size of our real economy. Two years ago, the CSO found there was €2.8tn, or €2,858bn, resting in these accounts. This month the IMF concluded that nearly two-thirds of Ireland’s foreign direct investment, about €450bn is ‘phantom’. It is transient money moving from one address to another to legally dodge the taxman.

It is a theme, outside Brexitannia at least, that EU solidarity will protect EU interests above all else. It is bizarre to imagine the same principle will not apply when our tax laws are reviewed. It also seems daft that at a time we are utterly reliant on EU support that we, no matter how we recoil at the accusation, can be called bad neighbours working hand-in-glove with the kind of capitalism that enfeebles democracies by not paying fair taxes. We should withdraw from the appeal and start planning how we might sustain this society should the EU, eventually, insist we become better, more reliable European citizens. They will because, no matter how we wriggle, they have right and morality on their side.