The Irish government has decided to appeal against the European commission’s ruling that Apple was given a sweetheart tax deal and should hand Dublin €13bn (£11bn) in fiscal payments.
The cabinet decision still needs to be endorsed by parliament next Wednesday but a group of independents in the ruling coalition who were concerned about the appeal have already been won over.
“A motion will come before the Dáil [parliament] on Wednesday seeking an endorsement of that [cabinet] decision,” a government spokesman said.
The tax deal has proved divisive, with the leftwing Sinn Féin party highlighting some voter concerns that the government is in effect turning down a windfall payment that would fund the struggling national health service for a year.
But it also plays into wider debates taking place in Britain and elsewhere about whether large corporations are avoiding their tax responsibilities. The counter-argument is that EC bureaucrats are in danger of chasing away multinationals that bring significant numbers of jobs to countries.
Ireland’s finance minister, Michael Noonan, said Europe had overstepped the mark in attempting to dictate tax laws and impose current laws on a tax deal with Apple that had been struck 25 years ago.
“I believe that there are some very important principles at stake in this case and that a robust legal challenge before the courts is essential to defend Ireland’s interests,” he said. “How could any investor come to Europe if their business was subject to retrospective taxes two decades later?”
Earlier in the week Tim Cook, the chief executive of Apple, described the EC’s decision as maddening and political. Cook wasconfident that it could be overturned on appeal.
“It’s disappointing, it’s clear that this comes from a political place, it has no basis in fact or in law, and unfortunately it’s one of those things we have to work through,” he said.
Cook called on Irish ministers to join the case against Brussels, saying it would undermine the other foreign investment in Ireland, which is a major source of jobs.
Noonan has repeatedly condemned the EC, which started investigating Apple’s tax arrangements in Ireland two years ago.
But Margrethe Vestager, the EC competition commissioner, has said it was wrong for Apple to have paid the equivalent of 1% corporation tax on its European profits in 2003 and that this was down to 0.0005% by 2014.
Apple disputes these figures but Vestager has made her case clear: “Member states cannot give tax benefits to selected companies - this is illegal under Euopean Union state aid rules.
“The commission’s investigation concluded that Ireland granted illegal tax benefits to Apple which enabled it to pay substantially less tax than other businesses over many years.”
The US government has waded in on behalf of Apple, arguing that the EC is trying to become the world’s tax police officer.
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