It’s official. The EU is going to take us to court over our failure to collect €13 billion from Apple.
Ireland has fought over the past few years to maintain its low corporation tax precisely because it wants to compete for inward investment against larger, aggressively successful countries. However, some people claim that the €13 billion is badly needed in our housing and health sectors.
We asked two commentators to debate the issue.
YES. IT COMES AS no surprise that the State has been referred to European Court of Justice (ECJ) for failing to attempt to retrieve the €13 billion it is owed by Apple.
The Irish government – and Apple – have consistently argued that Apple never had a “sweetheart” tax deal that other companies couldn’t also avail of, and so had no unfair advantage. Not only are both Apple and the Irish government appealing the European Commission’s ruling. In fact, our government is, incredibly, spending money to prevent having to accept the €13 billion. Some €100 million is being spent to set up an “escrow” holding account for tax owed to it by Apple.
So why bother with an appeal at all?
Why on earth would a government turn down €13 billion of, essentially, free money? The only possible explanation is that our government believes, simply by showing it is willing to charge corporations proper taxes, it is likely to lose the favour of many corporations operating here.
While many suffer the brunt of austerity, an elite few benefit from maintaining Ireland’s tax break status quo – the multinationals, the legal firms, the accounting firms and their Fine Gael cronies. Essentially, we are being held to ransom – charge us less tax, or we will leave.
And regardless of whether the tax breaks and loopholes Apple availed of were special treatment, or available to every multinational company, what is absolutely clear is that Apple paid well below the headline corporate tax rate in Ireland for decades.
It is only right that we the Irish people should now be compensated for that behaviour. The case should be read by our government as evidence that our country’s reliance on minimising the tax bill for mega-corporations is no longer – indeed never has been – a viable economic strategy.
What the government should be doing is taking the €13 billion to end that blackmail – by investing the money in building up decent, productive, indigenous industries, so we become less and less reliant on the likes of Apple. Alternatively, the government could use the €13 billion to tackle the housing crisis. The money would be sufficient to halve housing waiting lists if used to build 72,000 houses.
Unfortunately the government seems intent on pursuing an economic strategy purely based on bending the knee to large multinational firms. When the European Union and its institutions are criticising you for pursuing a strategy that is too pro-business, the game really is up.
Éilis Ryan is a councillor for the Workers’ Party in north inner city Dublin.
NO. THE EUROPEAN COMMISSION’S lawsuit against Ireland for failure to collect 13 billion Euros from Apple in back taxes must be seen in the context of the EU’s desire to harmonise corporate tax levels.
The head of the EU Commission, Jean Claude Juncker, is seeking to push through the Common Consolidated Corporate Tax Base (CCCTB) plan. He wishes to implement this plan by qualified majority voting (QMV) rather than by the unanimous consent of all member states.
Loss of tax sovereignty would be disastrous
This loss of tax sovereignty would be disastrous for a small country like Ireland. Over 20% of people working in Ireland are directly or indirectly dependent on the presence of foreign firms. According to the think tank TASC, we are more dependent on foreign direct investment than any other European country and what attracts them to Ireland funnily isn’t our exorbitant housing costs or our embracing of alcohol abuse as a cultural norm, but is in fact our low corporate tax rate.
Employers group IBEC has also warned that should Ireland be forced to implement a common EU tax rate and revenue collection system the state could lose out on four billion euros of corporate taxes a year. Putting this in context, 4 billion Euros less in collected corporation tax in the real world would equate to a 27.4% reduction in the 14.6 billion health budget for 2017.
We live in a globalised world and right now our most valuable commodity is our workforce. If we want them to be able to stay in Ireland we need to maintain our competitive corporate tax rate otherwise we could end up reverting to the days when our biggest export was people. It surprises me that with the EU seeking corporate tax reform that could be so detrimental to the economic well being of Ireland that there is scant Euroscepticism here.
AR Devine is a writer and published author. He won the Orwell Prize in 2010 for his blog, “Working with the Underclass,” written under the nom de plume of Winston Smith.
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