Wednesday 28 September 2016

The EU is coming after our corporate tax rate by stealth

Published 02/09/2016 | 02:30

People sign a petition outside the GPO over the €13bn in taxes that Apple now owes Photo: Mark Condren
People sign a petition outside the GPO over the €13bn in taxes that Apple now owes Photo: Mark Condren

The 'Apple tax case' is a strange beast indeed. Having promised to leave our corporate tax rate untouched, as a carrot to sign up to the Lisbon Treaty, it looks as if the EU is now coming after it by stealth.

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If it makes foreign investors nervous, the Germans and French might get a bigger slice of the action instead.

Perhaps it's more about that at the end of the day than the €13bn.

On the other hand, we have the almost unbelievable spectacle of an Irish Government planning to use perhaps millions of taxpayers' money to fight a legal challenge in order not to collect billions in taxes. It must be a first.

I'm glad to hear the State coffers are so full they can turn down the money. And the cherry on the cake is that many of the politicians planning to take this legal challenge appear to be the very same ones that badgered us four years ago to say 'Yes' to the 30th Amendment of the Constitution, which handed a slice of our national financial sovereignty over to the very same EU.

The catch-cry then was the usual 'Will somebody please think of the jobs?' and now it appears the same catch-cry is being employed to try and reduce EU interference in our sovereign financial affairs.

The State doesn't want billions in tax money and is now saying it wants less EU interference, after making us change our Constitution to have more. Strange days indeed.

Nick Folley, Carrigaline, Co Cork

Let the money rest in an account

Aren't we the great little country entirely? Just as we were nominated some years ago to sort out the European banking system, the European Commission, no less, unable to sort out the effects of globalisation on corporate tax practices, now calls "Paddy" to the vanguard. They want us to collect an international tax liability.

When collected it must be held in a separate account. Why a separate account? Because the Commission has indicated there could be tax claims from other countries where Apple has operations.

We must hold the money, then agree tax liabilities with those other countries and dole the money out accordingly. Consequently, it is very probable that little or none of this money would come to Ireland because Apple has already paid tax on its Irish operations. To suggest otherwise is both speculative and mischievous.

Maurice Curtin, Ballinlough Road, Cork

What about the €64bn 'state aid'?

The European Commission ruled that Ireland provided illegal state aid to Apple and as a consequence Apple must pay the State €13bn. What about the €64bn in state aid for the bank bailout? Was selective treatment given in this case too, I wonder?

Martin Carey, Athlone, Co Westmeath

Apple windfall talk reckless

In light of the Apple ruling against Ireland, it is naïve to talk of a 'windfall' for Revenue. It should be noted that Ireland has only been obliged to collect the tax. Her ruling makes clear that, "If other countries were to require Apple to pay more tax on profits… over the same period under their national taxation rules, this would reduce the amount to be recovered by Ireland."

In light of this, it is foolish to think of ourselves as enriched - any gains (if any) will be purely momentary and will pale in comparison to the amount of jobs losses and subsequent tax revenue losses as a result of this decision. Voters should bear that in mind when listening to the parties and representatives who short-sightedly crow over new hospitals and teachers. Such talk is reckless - and puts their accusations of "economic treason" in perspective.

Charles O'Conor, Dublin 20

EU has no axe to grind with us

MEP Brian Hayes's protests against the EU Competition Commission's ruling that Apple has been given preferential treatment from Ireland's Revenue (read Ireland's Government) might give him Brownie points in the insular world of Fine Gael, but do precious little for cogent argument.

His attack on personalities is a naive, if not condescending, attempt to deflect reality by shallow rhetoric. The European Union has no axe to grind with a member state. The excesses of multinationals' tax machinations, whether in The Netherlands, Luxembourg or Ireland, are legion.

In the UK, it is the Inland Revenue itself that has been attacking invalid tax schemes of multinationals.

If a state wishes to have a corporation tax rate of 12.5pc, as we have, it is within its rights and no one had the right to challenge it. But when that state, knowingly, taxes an entity at a rate of less than 1pc, questions should be asked.

Mr Hayes, improbably, asks why Ireland should be pulled up when countries like France have an effective corporate tax rate of 8.8pc.

Even a five-year-old could explain to Mr Hayes the difference between 8.8pc and 0.5pc.

It is not the effective rate that is in question, but the special arrangement rate of 0.5pc. Mr Hayes is quite incorrect in his assertion that a company can only be taxed on the profits generated on the activities within the country of its residence. If he were to take advice on his interpretation, he would be told that profits generated by a company outside that country would be taxable in that country.

It is risible for Mr Hayes to argue that Revenue thinks that the billions of profits earned by Apple in Ireland may/perhaps/should be taxed in the USA. It is said we have benefited by €50m, but to the benefit of one company not paying its dues of €13bn.

Harry Spillane, Mount Merrion, Co Dublin

State has endured enough

The Apple case is pure spin. The relevant law that is being enforced is designed to undermine our capacity to undertake active fiscal and industrial policy of the sort that pulled us out of the dark ages only a few decades ago.

The EU has become sick and sour - a giant policy sausage stuffed with the meat of German export interests and wrapped in the skin of French taxation policy.

If Ireland does not pull away from Europe and gravitate back toward natural alliances with the US and the UK,it will find itself crushed under the heel of an opportunistic and neglectful bureaucracy. We've endured the forced bank bailouts, we've stomached one in what will be many future rounds of austerity, now we are about to give up our capacity for industrial policy. Wake up, lads.

Philip Clarke, Free Trade Wharf, London, UK

Biting satire

As observed in Virgil's 'Aeneid': 'Beware Geeks bearing gifts".

Dr John Doherty, Vienna, Austria

Irish Independent

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