Apple tax probe could spark off five-year battle as Government vows to protect Ireland's economic interests
Finance Minister Michael Noonan said the Government will fight the European Commission in the courts if necessary amid reports that the Commission is yet again widening its probe into how multinationals use European countries to cut their tax bill.
The Commission has confirmed that it is investigating a possible breach of state aid concerning Apple's operation here and warned last month that it might widen the inquiry to include other companies in Ireland.
Yesterday, Reuters reported sources in Brussels as saying the inquiry could also include more companies in Luxembourg where it is also probing tax agreements.
Separately, Mr Noonan told the Dail that the Government will fight any adverse decision in the courts in a move that could delay changes.
"We are talking about somewhere between three and five years before the matter is resolved," Mr Noonan said in a response to a Dail question from Fianna Fail's Dara Calleary on the Commission's investigation.
"Protecting Ireland's economic interests is foremost in our considerations on this issue. We will provide a detailed, technical legal rebuttal to the Commission's position," he added.
A European Commission official told Reuters that the Commission continues to gather information on the tax practices of member states "and this might lead to new formal investigations".
Luxembourg is used by many multinationals, including online retailer Amazon, building equipment maker Caterpillar and UK mobile telecoms group Vodafone.
Pushed by France and Germany, Brussels is keen to clamp down on what it sees as unfair tax competition across the bloc.
If the Commission can prove countries such as Luxembourg and Ireland agree tax treatments that diverge from international rules, it could deem any corporate tax savings to be a form of subsidy that must be halted or even repaid.
In a strongly-worded statement in March, the Commission, the EU executive, chastised Luxembourg, saying it had "failed to adequately answer previous requests for information" and ordered it to outline many details of its tax system.
The finance ministry in Luxembourg was not immediately available for comment but in June it said it had "doubts about the legality of certain aspects of the European Commission's information requests."
Tax experts estimate that Luxembourg has used low taxes to attract more than 40,000 holding companies and thousands of high-paying jobs.