Friday 9 December 2016

Apple decision 'unhelpful' - IDA boss

Cormac McQuinn and Donal O'Donovan

Published 01/09/2016 | 02:30

IDA chief executive Martin Shanahan. Photo: Maxwells
IDA chief executive Martin Shanahan. Photo: Maxwells

The chief executive of IDA Ireland has said the European Commission's ruling on Apple is "unhelpful" and has made it "much more difficult" to attract multinationals to our shores.

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Martin Shanahan, the boss of the organisation tasked with persuading the likes of Apple, Google and Facebook to set up operations here, said that if the decision is allowed to stand, there will be "no certainty for foreign direct investment in any European country".

Meanwhile, Jobs Minister Mary Mitchell O'Connor vowed to deliver the 200,000 jobs promised by the Government despite the controversy over Apple's taxes.

IDA Ireland was quick to issue a statement on the Commission's ruling on Tuesday, saying the decision "appears to be internally contradictory and its basis flawed."

Mr Shanahan has since said: "certainly, this decision is unhelpful".

"The Commission decision... is unhelpful not alone for Ireland but it's unhelpful for Europe.

"The Commission made it much more difficult for Europe and Ireland to attract foreign direct investment.

"We have a situation where the Commission is retrospectively imposing its 2016 view of tax on a historic international tax context in Ireland," he said.

"If this is allowed stand there will be no certainty for foreign investment in any European country if the Commission can come in and retrospectively decide what it thinks the rules should have been," Mr Shanahan told Newstalk Radio.

In his initial reaction to the Commission ruling, Mr Shanahan said: "Ireland's position has not changed - we do not do tax deals, and it's simply untrue and a gross mischaracterisation of our taxation regime to say otherwise."

The agency emphasised that the Commission acknowledged that the decision does not call into question Ireland's tax system or its corporate tax rate.

Separately, the Irish Independent asked Jobs Minister Mary Mitchell O'Connor if she is concerned that the European decision threatens the Government's pledge to create 200,000 jobs by 2020.

"First of all, I profoundly disagree with the European Commission's decision," she said.

In relation to any threat to job creation, she said: "Am I worried? Obviously, we want to project ourselves in the very best way but I did speak to IDA this morning.

“They’re very confident the pipeline is very strong for jobs for this year and we look forward to creating the jobs that we have promised to do.”

Meanwhile, investor confidence in Ireland will suffer if the country fails to challenge the European Commission ruling that Apple benefited from tax treatment in Ireland that amounted to illegal state aid, bond analysts have warned.

Tuesday's ruling by EU Competition Commissioner Margrethe Vestager that Apple must pay €13bn in back-taxes should mean a dramatic one-off boost to the State's finance.

If the money was simply paid off the national debt, it would see the standard measure of debt to the size of the economy drop from an estimated 75.2pc to 70.4pc this year, instantly making Ireland among the least indebted countries in the Eurozone.

Investors typically see lower debt as a positive. However, analysts say, in this case the gain could be more than offset by perceptions that the ruling represents a threat to Ireland's tax sovereignty and to foreign direct investment (FDI).

Irish Independent

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