Sunday 24 March 2019

Cabinet agrees to appeal €13bn Apple ruling

Apple CEO Tim Cook met Taoiseach Enda Kenny on a recent visit to the company's plant in Cork
Apple CEO Tim Cook met Taoiseach Enda Kenny on a recent visit to the company's plant in Cork

Kevin Doyle Group Political Editor and Donal O'Donovan

The Cabinet has agreed to appeal the EU Commission’s ruling that Apple owes Ireland €13bn in back-taxes.

After a short meeting today, members of the Independent Alliance and Independent TD Katherine Zappone gave their approval for the appeal.

It followed 48 hours of uncertainty that involved a series of crisis meetings involving the Attorney General and other independent experts.

Read More: Blow for Kenny as ally backs EU in Apple tax row

Apple CEO Tim Cook Photo: AP Photo/Richard Drew
Apple CEO Tim Cook Photo: AP Photo/Richard Drew understands that Finance Minister Michael Noonan brought a memo to today’s Cabinet meeting on “tax justice”.

Read More: The Government's failure to prepare for this made jaws drop in Brussels

Junior Minister John Halligan: 'wants rid' of JobBridge Photo: Tom Burke
Junior Minister John Halligan: 'wants rid' of JobBridge Photo: Tom Burke

Crucially Independent Alliance junior minister John Halligan who said his “personal” view would be that Apple should pay the money, he does not want the Government to collapse over the issue.

Read More: Tax ruling will harm, not help, warns former EU watchdog

Minister Katherine Zappone
Minister Katherine Zappone

He is now expected to also back the appeal.

The Cabinet has agreed to:

- A review of our corporation tax code by an independent expert

• Transpose EU Directives by the end of the year to ensure exchange of information on taxation and greater co-operation between countries

• Take a lead on Tax Justice by hosting a high level meeting before the end of the year to include international speakers, Industry, campaigners and Governments

• Greater openness on tax rulings with time limits of 5 years and greater oversight for the Public Accounts Committee.

Despite the agreement, Ms Zappone said this afternoon that the arrangement between Apple and the Revenue Commissioners was "unethical" and said the European Commission "acted in the public interest by bringing this issue into the public, media and political spotlight".

"At the outset let me clear there are aspects of the European Commission decision I agree with as it corresponds with my well established views on the area of fair and just taxation which have been articulated many times and are a matter of public record," she said.

In respect of the appeal, Ms Zappone said she has agreed to back after significant consideration.

She said it would be an opportunity for tax justice for those who have "been denied money as a result of Ireland’s past actions".

"Countries who feel robbed or cheated can use this appeal to make their case.

"The appeal is an open forum which will bring legal certainty as to whether the European Commission acted within its mandate," she said.

Ms Zappone added that the €13bn figure is not accurate in her view and there would be "no such windfall for Ireland".

"In fact the best way to secure any monies for Ireland is through the appeal – as to do otherwise will only end in other prolonged court actions and delay," she said.

Finance Minister Michael Noonan will propose a motion to the Dáil next Wednesday, calling on TDs to affirm their commitment to:

•            12.5% corporation tax rate,

•            Research and Development tax credit, and

•            Knowledge Development Box

He said the decision to bring an appeal was now unanimous.

“I believe that there are some very important principles at stake in this case and that a robust legal challenge before the Courts is essential to defend Ireland’s interests.

“The full amount of tax was paid in this case and no State aid was provided.  Ireland did not give favourable tax treatment to Apple.  Ireland does not do deals with taxpayers,” he said.

At  a press conference outside Government Buildings the minister said a review of the corporation tax code will be undertaken by an independent expert.

However,  it will exclude any possibility of a change to the 12.5pc corporation tax rate.

“It is good practice to undertake periodic reviews of key areas of Government policy.  The last review of corporation tax policy took place in 2014,” he said.

“Since then a wide range of new international developments have emerged in international taxation, such as the OECD Base Erosion and Profit Shifting Project (BEPS). 

“We need to ensure that Ireland’s corporation tax code meets these new standards while remaining competitive as the economy continues to grow.”                                                

Minister of Jobs, Enterprise and Innovation Mary Mitchell O'Connor said the Government will "defend our sovereignty and devise our own tax code" at a meeting of business leaders in Dublin.

"We reject the Commission report. Our 12.5pc corporate tax rate is written in stone. We will defend our sovereignty and devise our own tax code," Minister Mary Mitchell O'Connor said.

The minister said the Cabinet is united on the issue, in an address to hundreds of business leaders from the US and around the world at a meeting of the Boston CEO Club at the Mansion House in Dublin.

The comments were greeted by applause from the floor.

At the same event the global chief executive of Coca Cola has praised Ireland's business environment and the success of the IDA.

"Ireland is a great place to do business," Coca Cola CEO Mhutar Kent said.

He described the unique partnership between the US and Ireland.

Earlier, Ireland’s European Commissioner Phil Hogan  has strongly backed Brussels in its €13bn tax ruling against Apple.

The former Fine Gael Cabinet minister and key ally of Taoiseach Enda Kenny confirmed he supported the finding of illegal state aid being granted to Apple.

The development came as a furious behind-the-scenes row broke out between the Department of Finance and the Taoiseach’s office over who is to blame for the Government’s ham-fisted response to the crisis.

In his first public comment on the issue, Mr Hogan said all 28 Commission members supported the decision.

Speaking to the Irish Independent, Mr Hogan said it was a collegiate decision made by the Commission.

“It was approved by all 28 Commissioners. It will be appealed by the company involved, and perhaps by the Irish Government, if that is what they decide. Given these pending EU court proceedings I can make no further comment at this time,” he said.

Mr Hogan’s appointment to the biggest job in the Taoiseach’s gift was seen as a reward for taking unpopular decisions around water charges.

Today, Finance Minister Michael Noonan will present a memo to Cabinet aimed at addressing Independent ministers’ concerns around appealing the decision and supporting a drive for tax fairness and transparency.

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