Saturday 3 December 2016

EU tax chief takes two bites from Apple €13bn

Austria and Spain eyeing up €13bn tax windfall

Niall O'Connor and Sarah Collins

Published 10/09/2016 | 02:30

German Finance Minister Wolfgang Schauble (left) with EU Commissioner Pierre Moscovici in Bratislava. Photo: AP
German Finance Minister Wolfgang Schauble (left) with EU Commissioner Pierre Moscovici in Bratislava. Photo: AP

The EU's tax chief is giving two contradictory accounts of how Ireland could use the €13bn from the Apple tax ruling.

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The development comes as Austria and Spain are understood to staking a claim for the tax from the US multi-national.

And Italy and France are also reported to be eyeing up a slice of the €13bn windfall.

European Commissioner Pierre Moscovici yesterday criticised the decision by the Government to appeal the Apple ruling as he claimed the money could be used to improve services.

"The Irish Government decided that it would go in front of the courts. We are, of course, respecting that," he said.

"It is a strange decision, in a way, to say 'I don't want your €13 billion' when you could have some social programmes or economic programmes in a country that has been damaged by a crisis.

"But that's their own will," he added at a meeting of EU finance ministers in Bratislava, Slovakia.

Yet Mr Moscovici told Labour Party leader Brendan Howlin the money could be used only to pay down the national debt.

In a letter on Thursday, the Commissioner said, if recouped, there were clear rules on the use of a once-off windfall.

"It is correct that EU state aid rules place no restriction on the use of aid to be recovered by a member state following a ruling by the Commission," he says in letter seen by the Irish Independent.

However, the letter continues, the EU's recommendations on fiscal policy for Ireland was only to "use windfall gains from strong economic and financial conditions, as well as from asset sales, to accelerate debt reduction".

Contradiction

Mr Howlin said there is a contradiction in Mr Moscovici's public remarks and his letter.

"This letter from the Commissioner seems to fly in the face of what he has been saying to the public, and shows how political the actions of the European Commission have become," the former Public Expenditure Minister said.

During a dramatic day in the Europe, Finance Minister Michael Noonan was forced to defend Ireland's case, hinting that Luxembourg, Belgium and the Netherlands - who are appealing similar EU decisions - were on Ireland's side.

"I wouldn't agree with him," Mr Noonan said of Mr Moscovici. "He's a Commissioner. Obviously the Commission will defend their ruling and we'll appeal it."

Mr Noonan said he was "not trying to drum up support" for Ireland's appeal at the meeting.

"In a court case, you don't drum up support. But there have been cases and rulings in the last 12 months or so in respect of Luxembourg, Belgium and Holland, and they have all appealed, and Ireland has associated itself with the appeals, and we are legally represented at the appeals," he said.

"I would assume something similar will happen in this case because interested parties will be very interested in the legal argument because of the similarities between the cases," he added.

France and Germany threw their support behind the Commission last week, a position Dutch finance minister Jeroen Dijsselbloem - who chairs the monthly meetings of eurozone finance ministers - took up yesterday. "I support that the Commission has a role to play here and, here again, a strong Commission is important," Mr Dijsselbloem said.

"We need to make sure that there is no state aid in the way we apply our tax policies, and certainly not on international standards in our tax policies."

Windfall

Austrian finance minister Hans Jörg Schelling said other countries were looking into whether they could benefit from the €13bn tax windfall.

"If what the European Commission says is legitimate, you can be assured that I, as finance minister, would take it,'' Mr Schelling said of the money.

Mr Schelling said the Austrian government was examining "intensively" whether some of the money was owed to Austria, and said Italy and France were doing the same.

"We are all checking at the moment," Mr Schelling said.

However, spokespeople for the French and Italian finance ministries denied such examinations were taking place regarding Apple.

The Irish Independent understands the Spanish government, which recently announced a corporate tax overhaul, is also looking into whether it might be due some back taxes from the US tech giant in the wake of the Commission ruling.

Irish Independent

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