Wednesday 26 July 2017

Vestager: Ireland must collect €13bn Apple tax - but other EU countries could claim share

EU’s Margrethe Vestager. Photo: REUTERS/Eric Vidal
EU’s Margrethe Vestager. Photo: REUTERS/Eric Vidal
Donal O'Donovan

Donal O'Donovan

Other EU member states will have to prove that Apple made profits in their jurisdiction in order to claim a share of the €13bn Ireland has been ordered to collect in Apple back taxes.

European Commissioner for Competition Margrethe Vestager said that Ireland must collect the tax, but other states could claim a share by proving the profits were generated there.

Apple has argued that its global profits fall due in the US, not countries where it sells products.

Ireland has yet to collect the money, which will be held in escrow while challenges to the ruling by the State and Apple work through the EU courts, the Commissioner said.

Apple has said it will make the payment, the delay in collecting the tax reflects the complexity of locking away such a large sum, Margrethe Vestager said.

Including legal challenges and appeals the money could be on-ice for as long as five years.

She remains convinced that the total to be paid by Apple will be at the the  €13bn level, Commissioner Vestager said.

Speaking in Dublin, she denied that 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 investment.

"Europe is open for business,” she said.

“Europe is probably the biggest, richest market in the world," she added.

The Commissioner is in Dublin for an appearance at the Oireachtas Finance Committee today, where she will answer questions from TDs and senators.

The Apple tax ruling has been challenged by the Government here, which says it is not entitled to the €13bn, and by Apple itself.

It is understood that the Commission has until the middle of March to make a formal reply to the Irish challenge to its ruling, in a case that will ultimately be heard by the European General Court in Luxembourg.

Each party to the case will have a number of opportunities to submit rounds of written legal pleadings before an initial oral hearing in Luxembourg – which could still be more as long as two years away. 

Defended

Apple has said it will make the payment, which will sit in an escrow account for what's expected to be around five years until the challenges against the original ruling and any subsequent appeals are heard.

Ms Vestager, a former Danish deputy prime minister, has staunchly defended her findings that Ireland granted billions of euro in illegal state aid to Apple.

Fine Gael senator Kieran O'Donnell, who is a member of the committee, said he welcomed her decision to attend the hearing, whereas Apple has declined to speak.

However, he said the Apple tax ruling had raised serious questions, including over the independence of the Revenue Commissioners and Ireland's tax sovereignty, and was in language that was "very ambiguous and confusing".

Finance Minister Michael Noonan, who is challenging the ruling having secured support from the Government, will appear at the Committee on Thursday.

Irish Independent

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