Revenue refuses to comment on EC accusations over tax
The Revenue Commissioners has refused to comment on a European Commission claim that companies here were taxed inconsistently for similar activities.
Revenue said it would give a response only after legal challenges to the EU's Apple tax ruling were finished.
With both Apple and the Irish Government appealing the commission ruling at the EU General Court, it could be years before the €13bn case is finally resolved.
In its ruling, published on Monday, the European Commission and Margrethe Vestager appeared to raise significant questions not only over how Apple's tax was calculated, but also for other, similarly structured companies whose tax affairs were examined.
"Ireland has lodged an appeal with the General Court of the European Union and Revenue will not be commenting further on the details of the commission's decision, as the matter is the subject of open legal proceedings," a spokeswoman said.
She referred to a statement issued in August by the chairman of the Revenue Commissioners Niall Cody. At that time the commission initially ruled that Ireland must collect €13bn in back taxes plus interest from Apple.
That statement said that in relation to Apple: "There was no departure from the applicable Irish tax law by Revenue; there was no preference shown in applying that law; and the full tax due was paid in accordance with the law."
In the 130-page Apple ruling published on Monday, but originally circulated to the Government and Apple back in August, officials in Brussels said they had looked at the Irish tax affairs of 14 other, unnamed, companies for context during the three-year Apple probe. The 14 firms had similar structures to Apple - multinational corporations with money flowing between Irish and non-Irish subsidiaries and therefore a need to allocate profits either to the Irish units or elsewhere in order to reckon where tax was paid.
The EU said Revenue's application of the ruling on how to allocate profits was "too inconsistent" to be used as a reference.
The commission said that after looking at the 14 cases it "was unable to identify any consistent set of rules that generally apply on the basis of objective criteria to all non-resident companies operating through a branch in Ireland".
The claim is potentially highly significant, challenging the idea that all companies are taxed alike.
However, the Finance Department this week insisted that Brussels' position was based on a misunderstanding of the Taxes Consolidation Act 1997.
"The commission's alternative line of reasoning misunderstands Irish law. The commission is wrong to maintain that 'arm's length principle' (ALP) is inherent in Irish law, that Section 25 was applied inconsistently or that Section 25 confers any impermissible discretion. Section 25 confers no such discretion on the Revenue Commissioners," it said.
"The commission's alternative line of reasoning misunderstands Irish law. The commission is wrong to maintain that ALP is inherent in Irish law, that Section 25 was applied inconsistently or that Section 25 confers any impermissible discretion," it said.
The commission's case that Ireland gave illegal aid to Apple through sweetheart tax deals will boil down to proving that the company received an advantage compared to similar corporations in Ireland.
The Government has launched a formal appeal at the EU General Court. Apple has also launched an appeal.