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AS THE GOVERNMENT claims the court decision today in favour of Ireland and Apple as a win, opposition politicians and business groups have questioned what it means for transparency and fairness in the country’s tax system.
The General Court of the European Union ruled in favour of Ireland and Apple in their appeal against the European Commission’s finding that the country breached state aid rules in its dealings with the multinational.
The European Commission previously ordered the US company to hand back €13 billion in unpaid tax and over €1 billion in interest payments to the Irish government.
The Department of Finance today said the decision showed there had been “no special treatment” for the tech giant. Speaking to RTÉ’s Today with Sarah McInerney, junior minister and Fine Gael TD Colm Brophy also welcomed the decision which he said was a vindication of the Irish government’s position.
“I think that is a very very welcome decision in terms of the clarity it should give right across the board for all businesses in our country paying taxes and also the vindication that the government was correct in the position that it took.”
However Sinn Féin’s finance spokesperson Pearse Doherty said today is “a bad day for the taxpayer”.
“The Department of Finance may be thinking that this is a good day for themselves. Morally, this is a terrible day, the fact that the richest company in the world was able to generate over €100 billion of profits and not pay tax anywhere in the world on those profits despite the fact that the way the companies are incorporated here in Ireland.”
He rejected the suggestion that if the government had lost the case today it would have struck a blow to the sovereignty of Irish states and discourage foreign direct investment in Ireland.
“The 12.5% [corporation tax] rate isn’t at question here and it’s not about the sovereignty of the Irish tax code that’s at question here. This is about State aid that was before the courts, and indeed the European Commission in the past has ruled against Ireland as a result of State aid and we just sucked it up and dealt with it we didn’t appeal it.
“Every year when we deal with the Finance Bill we need approval in terms of State aid for a number of our tax codes, for example when we bring in taxes that support farmers, it needs State aid approval. So this is a common thing that’s going back for many, many years.”
Doherty said it is “unacceptable” that small and medium companies are being asked to pay 12.5% tax on their profits when the wealthiest country in the world was not.
“Remember what’s at the core here and what Colm Brophy and others are now suggesting that the law is that Apple’s taxation rate was 0.005%,” he said.
“That means that for every €1 million of profits that they made, the law in Ireland allowed them to pay €50 of tax. I’m sure that for many corner shops, many hairdressers, many other businesses who are paying tax at the appropriate rate that will be a red rag to them that it was allowed.”
People Before Profit TD Richard Boyd Barrett said the government should “hang their heads in shame for aiding and abetting Apple’s tax dodging”. He accused the government of having “thrown away” €13 billion which is needed to help the economy to bounce back.
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“That money, which is so desperately needed, could have been put to use in mitigating the Covid-19 crisis which is having such a massive impact on our economy and society,” he said.
“The question should be put to the Green Party TDs if they are happy to stand over a regime that looks to prop up the tax avoidance strategies of some of the wealthiest companies in the world, thus denying our public services like hospitals, schools and infrastructure from desperately needed revenue.”
Ibec, the group that represents Irish business has noted the outcome of today’s proceedings. Its CEO Danny McCoy said:
We want Ireland to be the best place in the world as a business location. As such, it is crucial for all businesses, multinational and indigenous, that Ireland’s tax system is, and is seen to be, transparent and equitable.
Also speaking to RTÉ, Green Party TD Neasa Hourigan said the decision is a blow to the EU Commission in terms of its development of tax policy and is likely to be appealed to the European Court of Justice. She said this was “quite a technical case” and the Commission had not been able to “deliver the burden of proof”.
Hourigan said that in general the government should be pursuing corporations to ensure they are paying “their fair share”.
She pointed out that the State has already spent millions on legal fees in this case. “I think we do need to start to think about whether the best interests of Apple are fully aligned with the best interests of the State,” she said.
Vice President of the European Commission Margrethe Vestager said the judgement will now be carefully studied as the Commission reflects on possible next steps.
She said the Commission “fully stands behind the objective that all companies should pay their fair share of tax”.
“If member states give certain multinational companies tax advantages not available to their rivals, this harms fair competition in the EU. It also deprives the public purse and citizens of funds for much needed investments – the need for which is even more acute during times of crisis.”
Corporate tax avoidance
Following the ruling, Oxfam called on the Irish government to “urgently address continued and extreme corporate tax avoidance”.
A recent Oxfam review of the EU Tax Haven List showed that royalty payments sent out of Ireland amounted to more than are sent out of the rest of the EU combined.
“These repeated cases of tax avoidance point to the need for more fundamental tax reforms at EU and global level,” said Michael McCarthy Flynn, Oxfam Ireland’s senior policy and research coordinator.
“These include a digital service tax, a minimum effective tax rate, effective measures against tax havens and new rules that require companies to disclose where they generate their profits and where they pay their taxes, for each country they operate in. This would give governments and civil society the ability to hold companies to account.”
“In the wake of COVID-19 and the devastating economic fallout already being felt, governments must not continue to spurn the chance to raise vital revenue in corporate tax income for the benefit of their citizens,” he said.
“Corporate tax avoidance costs governments hundreds of billions of euros every year – money that could be used to deliver essential services, such as health and child care, which are even more critical in the wake of the global pandemic.”
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While there were some who were fans of Charlie Haughey, there were others who from the start of his political career saw him for what he was: a corrupt, arrogant, stroke politician who was power-hungry in the extreme. Many of those were his constituents in Donnycarney, good working people who saw the gimmickery and cant which won him elections. He deigned to make appearances there at elections time, blaring music and slogans from his vehicles, handing out “gifts” like a bottles of a brand of perfume called Charlie, to the peasantry. So, less of the “fiercely popular” and “revered” stuff of your piece. Fianna Fáilers loved him, the thick and ignorant ones particularly, but the cute hoors too. I hope The Journal is not becoming part of the FF rehabilitation plan, like it seems RTE and Vincent Browne have.
Good comment . In fact there are still blind sheep following these fellows who actually believe them.isn’t that astonishing! Haughey was the greatest trickey not to mention womaniser of them all , and we’ve had some beauties. We are in a political trough which we won’t get out of for years
and one thing that FF will never be short of is thick crooked hoors or out right crooks. Charlie is still widely admired and beloved by FF. What are the chances of Micheal Martin saying that Haughey was a thief, a gangster and that he left a poisonous legacy in Irish politics that is killing the country. Not a chance, Micheal Martin was a friend and admirer of Haughey and owes that cabal his rise to power. Until the cancer that is FF’s mindset and value system is destroyed, this country will always be at risk of another collapse.
As a relative newcomer, I have many questions on several different topics. However, the most pressing is this…. After undinable evidence against Charlie Haughey, how is it that you permit yourselves to be lead down the same path again? Bertie was of the same fabric as Haughey. Yet it appears that the people of this country rather be swindled, cheated and lied to by thier own than a foreigner. The fact that no one is in jail or sanctioned proves this fact.
In addition, to my above query… How is that you permit tax dodgers, blatantly corrupt and sorely unqualified people run this country? Collecting salaries that are higher than the average American politician? Collecting two pensions?
marlon as a new-comer it may be hard for outsiders to understand but actually its very common across the globe where there was a civil war and ireland is no different .You had two sides as in most civil wars and it takes decades and many generations removed from the event to break down the old die hard tradtions that stem form the civil war.No matter how corrupt or inept there guy is the will always support him over the other guy as he is not on the side the fought for or belived in, hence the support base for both finna fail and fine gael and until all the people wake up and realise the civil war is over and we should bury both these parties with the people who fought and died in it.it will happen im sure, maybe the next generation will be unwilling to listen to their parents on who the should vote for and of course we have to offer them an alternative
This makes sense! Our history books tells us in the United States that the people who profited from the Civil War was called Profiteers. They took advantage of the breakdown of society, laws and the ambiguity of all once known. What pulled the country through the hardship was a sense of pride for the nation. It took about 50 years for America to become united. Yes the United States still have nay-sayers who would prefer the United States break up and become individual entities… But the folks are relatively few. And tbe pride to be an American is strong.
I don’t feel the same strength of pride exist here. There appears to be more pride focused at a sports team than this wonderful Republic of Ireland.
And all the while the profiteers of Ireland continue to take advantage of the seperation of mind.
Any gift gave to you because you are a state employee. Belong to the state. If you did not hold that position you would not have got any of them. Simple as that.
Not true, if an item is gifted to an individual it is theirs and theirs alone. Most departments will allow gifting within financial limits (to the best of my knowledge) after which any public servant should be required to refuse the gift.
If we follow your logic it would lead to the expropriation of private property for state use. I know we have examples if this already, but they are limited in capacity and timeframe.
Do not any gift gave to a public servant ie TD ETC because of there position belong to the taxpayer public. And gifts gave to the UK Monarch belong to the people because she only got it because of her title.
After reading this title, i was disappointed that none of the things he was sent included loads of cash in brown sacks with dollar signs on them. Ansbacher my arse!
We must be the biggest shower or fools in the world to let it go on !, people were happy to vote FF when the promises and goodies were been handed out , so don’t complain now when the party has to be paid for , and for a long time to come
hi marlon your spot on with with the stuff you said, again it goes back to the civil war and the continuing fighting in the north of ireland when acts of national pride or flying of the tri-colour was seen as bad and you were asscocatied with beening a paramilatary so the only out let for national pride was a sports team. i notice we got loads of dislikes ,these must be the same ppl who vote for michael lowry, the healy raes and all the other tds and councilors who were named in the mahon and moriarty reports . i spoke the truth why else or how else can any one explain the fact that even after being exposed as corrupt the get voted back in???
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