Sunday 25 February 2018

'Appealing Apple tax decision a mistake' - academic

European Commission dispute 'damages Ireland's reputation'

Professor Jim Stewart warned EU public opinion could interpret the appeal as government support for Apple’s tax strategies. Photo: Reuters
Professor Jim Stewart warned EU public opinion could interpret the appeal as government support for Apple’s tax strategies. Photo: Reuters
Colm Kelpie

Colm Kelpie

Appealing the Apple tax decision damages Ireland's reputation, a Trinity College academic has said.

Professor Jim Stewart, who in the past has claimed US multinationals here have paid as little as 2.2pc corporation tax, warned EU public opinion could interpret the appeal as government support for Apple's tax strategies. And he said it was unfortunate that Ireland was in dispute with the European Commission when it may need to seek important concessions in the wake of the Brexit vote.

"I think taking this appeal damages Ireland's reputation and I think it was a mistake," Professor Stewart told an Oireachtas committee.

The European Commission announced last August that Ireland must collect around €13bn-plus interest from Apple as a result of a tax treatment that amounted to illegal State aid to the company. The Government and Apple have appealed against the decision.

Prof Stewart told the Oireachtas Finance Committee that the Government's case was "identical" to Apple's case, and that the Government was spending considerable sums defending the Apple case.

Risk

Michael McGrath arriving at Leinster House. Photo: Tom Burke
Michael McGrath arriving at Leinster House. Photo: Tom Burke

"In the context of Brexit, where we're likely to seek important concessions from our EU partners and special economic measures, it is unfortunate that in two areas, the introduction of CCCTB (Common Consolidated Corporate Tax Base), and the Apple case, Ireland is in dispute with the commission," he said.

"There is a risk that by appealing this case, a number of EU governments, and perhaps more important, public opinion in EU countries, will interpret this appeal as support for Apple's strategy."

Prof Stewart claimed Apple had "deep pockets" and the appeal could last several years.

It will be a "constant reminder to public opinion that Ireland apparently supports Apple's tax strategies", he said.

The professor said he believed the money was legally owed to Ireland, but that in terms of economic value added, there was likely to be a tax liability in other countries.

In that context, Fianna Fáil finance spokesman Michael McGrath replied that the payment of €13bn to Ireland from Apple "is hardly a leading example of tax justice".

"It's better than Apple not paying any tax at all on those profits," Prof Stewart answered.

Mark Redmond, chief executive of the American Chamber of Commerce Ireland, said it backed the decision to appeal. He said Ireland or any other EU state can't afford to have its tax policy "second guessed in a retrospective fashion".

Brian Keegan, director of taxation with Chartered Accountants Ireland, said the decision by the commission "infringes on Irish sovereignty".

He said there should be certainty for tax purposes, otherwise "we are all just making up the rules as we go along".

Jim Clarken, Oxfam Ireland chief executive, said the UN estimated that every year developing countries lose $100bn as a result of corporate tax avoidance schemes.

"This is enough to pay for the education for all of the 121 million children that currently are not in school," he said.

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business