Tuesday 21 February 2017

Ireland to get 'majority of  Apple €13bn'

Vestager defends intervention in tax case but warns other countries may still seek a share

Published 01/02/2017 | 02:30

EU Competition Commissioner Margrethe Vestager at Leinster House yesterday. Photo: Tom Burke
EU Competition Commissioner Margrethe Vestager at Leinster House yesterday. Photo: Tom Burke

The bulk of €13bn that the European Commission says Apple must pay in back-taxes to undo the benefits of a previous sweetheart tax deal will remain with Ireland, EU Commissioner Margrethe Vestager has said.

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That's despite her own invitation to other EU member states to explore whether the money should be paid to them.

Her offer to other states to seek a share of the funds has been controversial, raising the question of how Ireland could be owed tax also owned elsewhere.

"My guess is the large, large majority of the unpaid taxes would be due in Ireland," the commissioner told TDs and Senators at the Oireachtas Finance Committee yesterday.

The record-breaking €13bn ruling has been challenged by the Irish Government - which is accused of providing the illegal aid, and by Apple which must pay the cash. The cases and subsequent appeals could take up to five years.

"A slow bicycle race between the Apple case and Brexit seems to be emerging now to see which will reach the destination first," Finance Minister Michael Noonan quipped yesterday.

An initial deadline to collect the tax bill plus interest from Apple had passed, the commissioner said, but she was not concerned.

Apple has said it will make the payment. The delay in collecting the tax reflected the complexity of locking away such a large sum for an extended period, Ms Vestager said.

However, other sources close to the situation have said the delay is down to the complexity of working out how much Apple must pay precisely, using the commission's formula. That work is being done by tax authorities here.

Commissioner Vestager said she believed the final number would be around the headline-grabbing €13bn level she announced back in August.

Other EU member states would have to prove that Apple made profits in their jurisdiction in order to claim a share of the €13bn Ireland had been ordered to collect in Apple back taxes, she said, adding that the EU could not provide details to help them.

In response to a question from Fianna Fail's Michael McGrath, she denied that last year's Apple ruling fully tax its profits was part of a wider European Commission agenda to control tax affairs.

She insisted she had sworn to defend the EU treaties, including the right of states to set their own tax policies.

"These (State Aid) cases do not mean that the commission is claiming authority over tax rules - national or international. They do not affect the sovereign right of member states to determine their own corporate tax systems, or to set their own tax rates," she told the committee.

Earlier, she told reporters that the commission had no open investigations into the tax affairs of any other companies in Ireland.

However, she left open the potential for further action.

"We will still be asking questions in Ireland, in Luxembourg, Netherlands, German and in any member states," she said. Speaking in Dublin, she denied Brussels had launched a witch-hunt against US technology businesses, despite recent high-profile cases taken against Facebook and Google, as well as Apple.

She said she didn't believe the actions would dampen US enthusiasm to invest in Europe.

Ireland is one of the main European beneficiaries of US foreign direct investment.

"Europe is open for business," she said. "Europe is probably the biggest, richest market in the world," she added.

Meanwhile, it is understood the commission has until the middle of March to respond to Ireland's defence in the Apple case.

Irish Independent

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