MICHAEL CLIFFORD: Apple ruling: High farce hovering just on the right side of tragedy

AT LEAST we got value for money. We, the citizens, forked out, on the last count, €776,000 in legal fees to fight the EU competition commission’s attempts to give us money, writes Michael Clifford

The estimate of what we were due in back taxes from Apple varied over the last week from around €1 billion to €4 billion. And guess what? We’re in line for a full €13 billion. That’s about the same amount as we shovelled into AIB to make up for the shortfall left by big time Charlie bondholders.

So the lawyers done good by us, even if their brief was to ensure we got no money, even if they lost the case the government hired them to fight, they still came home dripping in billions.

Examining the essence of yesterday’s ruling by the EU competition commission is liable to make your head hurt. Nothing is as it seems. Everybody appears to be togging out for the opposition. All have great difficulty doing basic sums. It’s next to impossible to discern who is running the show. And above all, not only is the soverign government of this Republic all over the shop on the matter, its leader and ministers are simply not on the level with the rest of us.

EU Competition Commissioner Margrethe Vestager.

The EU has ruled that Apple was given a sweetheart deal, and on the face of it the evidence appears to be compelling. The company negotiated two deals with Ireland in 1991 and 2007, which included meetings between Apple people and the Revenue. The minutes from those meetings are central to the EU’s ruling.

What came out of this is that Apple opened a head office in Dublin as a means of funnelling its non US earnings. The effective rate of tax paid on its European profits thus went from 1% in 2003 down to 0.005% in 2014. We have been told for decades that a low corporate tax rate of 12.5% was necessary to attract foreign direct investment to this country. Now we find out that Apple obviously believed such a rate was daylight robbery, something that perhaps should be paid by the little companies but not by a giant such as it.

Now we’re told to go and collect all that back tax. The government could have applauded the ruling and told us to consider it a little payback in corporate terms for the absence of practically any tax paid by vulture funds which have been hovering up cheap property for the last five years. Or, the government could have said that this would go towards the extra contribution we must make to the EU on the basis of our alleged 26% growth in GDP, as revealed last month.

Instead, Michael Noonan has said that Apple’s money is no good around these parts. It’s all about reputation apparently. IF Ireland accepts the ruling, we get a name for being the Wild West in tax haven terms. Except, we were first labelled the Wild West in the New York Times eleven years ago.

Since then, Ireland’ reputation has been thrashed around Brussels, Paris and Washington. It’s not that we offer such a generous corporate tax rate, it’s just that having done so we insist that we don’t really want multinationals to pay any tax at all in case they might throw a strop. There are plenty of little people in this country to pick up the slack with a whole slew of taxes.

The reputation defence in refusing to take the money doesn’t wash. What would be refreshing in this area would be to strive towards a reputation for honesty rather than sleveenism. An admission that things were done wrong in the past and that such carry-on has been addressed and eliminated in the last two years might go a long way.

A windfall of €13 billion would also go a long way. Consider that the government’s surplus in teh forthcoming budget is estimated to be €1 billion. What could be done with thirteen times that amount in an area like housing for instance?

But no, Noonan ain’t going there. It would be too simple, too much like common sense, an example of natural justice for the years in which the citizens were bled dry. Instead the government will appeal and if things go according to plan, his successor can triumphantly proclaim that he or she has successful appealed efforts to force a big corporation pay a relatively small amount of tax.

Sinn Fein’s Pearse Doherty called for an inquiry into the whole affair. If there’s one thing we need less than a tax windfall it’s another inquiry. Then again, why not? At this stage it would be entirely in keeping with what has become high farce, hovering just on the right side of tragedy.


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