Sunday 25 September 2016

Cork jobs, billions in back taxes - everything you need to know about the Apple ruling

Shane Phelan and Donal O'Donovan

Published 30/08/2016 | 02:30

Apple regards Ireland as one of its long-term bases
Apple regards Ireland as one of its long-term bases

All you need to know about today's Apple ruling:

  • Go To

1. We're fairly sure the Commission has found against Ireland, what happens next?

The decision announced today will just be Round One in a case that could run for another five or six years. The Government's first move will be to appeal the Commission ruling to the EU General Court - proceedings there will be aimed at annulling the ruling.

If that fails, the Government can appeal to the EU Court of Justice. The initial appeal must be lodged within two-and-a-half months of the commission's finding being delivered.

 

2. What happens with any fines or back tax in the meantime?

Whether Revenue here must hit Apple with an immediate tax demand depends on the terms of the commission's decision. It will spell out the tax bill and when it must be collected.

If the settlement is in the low millions, the cash would be paid over, absorbed into State coffers and paid back to Apple in the event of a successful appeal.

If it runs to billions of euro, a more complex structure will be used to park the cash in an account where it will be left untouched, pending all appeals.

The Department of Finance has retained barristers in Ireland and the UK over the past two years to work on the appeal.

 

3. Does all this threaten jobs?

Apple regards Ireland as one of its long-term bases. Chief executive Tim Cook went so far as to say that even if the European Commission penalised its tax arrangements here, it wouldn't threaten the company's commitment to its 6,000-strong facility in Cork.

Current developments appear to back this up. Against the backdrop of imminent punitive action from Brussels, Apple recently went ahead with planning permission to expand its Holyhill facility for up to 1,000 new jobs. Cork was Apple's first major base outside the US, opened by Steve Jobs in 1980. It is the company's only wholly owned manufacturing facility outside the US.

As for the Irish Government, Apple is a bellwether case to show other multinational corporations that the country will defend investors against supranational fiscal probes.

 

4. Why can't the Government just use the money to improve public services?

Ireland has agreed to EU budget rules that specify that if "windfall gains" come our way in 2016 or 2017 the money will be used to accelerate debt reduction. A paper agreed by the EU Council states that after the recent economic turmoil this approach will help "reduce vulnerability to economic fluctuations and shocks". The ultimate affect of paying down more debt this year should be more spending power next year.

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business