Thursday 24 May 2018

EC set itself up as 'prosecutor, judge and executor' in Apple tax case - minister

Education Minister Richard Bruton Photo: Tom Burke
Education Minister Richard Bruton Photo: Tom Burke

Alan O'Keeffe and John Downing

The European Commission in the Apple tax case has set itself up as "prosecutor, judge, and executor," said Education Minister Richard Bruton today.

He denied there was a rift in the Cabinet over whether the State will appeal the decision of the commission seeking a €13bn tax payment by Apple to Ireland.

Asked how deep was the rift in the Cabinet, he said; "I don't think there is any rift. I think what the situation is that every minister wants to study the full judgement. We had a very useful discussion yesterday. I think that was very positive on all sides.

"We agreed to resume those discussions on Friday, having given everyone the time to study in greater detail the judgement.

"And I think that is the right way to go and I think that is a perfectly valid way to proceed."

Asked if the cabinet will agree, he said; "I'm very optimistic that agreement will be reached. Clearly, this is a very important judgement has occurred here.

"In our view, our Revenue Commissioners are very independent. They have always applied the tax law without fear or favour in a fair way.  This is an attack on that.

"I think, naturally, every business has an expectation that when they get a ruling from the Revenue Commissioners, they can build their investment plans with certainty on the basis of that. So it's very important that we stand by our Revenue in this situation. And I believe that is the right thing to do.

"Obviously, do we want to go through the full detail of the case that is being made by the European Commission? I think it is important to recognise that this is just a case being made by them. This would have to be adjudicated upon finally in a legal way. That has not been the case in many ways.

"The European Commission has decided to set itself up as prosecutor, judge and executioner in the case of this. And that, clearly, is an unusual power to be seeking to be taken on by the Commission."

Asked about the Commission statement that its ruling was based on facts, he said: "The ruling was based on a misinterpretation of tax law.

"The truth is that in tax law, Ireland has always pursued a very clear law-based tax regime. And under that, companies can go to the Revenue for opinions as to the implications of that law. And when those opinions are given, companies act upon those," he said.

Minister Bruton continued "At the time in 1991 and 2007, the Irish Revenue Commissioners made a judgement that was entirely in accord with proper tax practice and the Irish tax law.  I have no doubt about that.

"The European Commission's judgement or, at least, opinion they are offering is that Ireland should seek to be the tax policeman for the world code in respect of companies.

"Now that is not a concept that existed in 1991 or in 2007.

"In terms of the future, I believe everyone agrees that some corporations are paying too little tax. They play one tax system off another. But that is a solution that we have to find collaboratively with all countries working together.  And I think that the European Commission in their own statement very clearly said, that while they expect Ireland to be the tax collector for this tax, they recognise that the US and Europe could have all sorts of claims on this alleged liability that's out there.

"Clearly, that admits that the approach they have taken could not be consistent with a single revenue authority making rulings back in 1991 or 2007. The Irish had not been given, and does not have such powers and never had.

"I think they have broken new ground in the approach they are taking. It's not one with which I concur. I think it would be a very serious assault on a sector that employs directly and indirectly almost 350,000 people.  And we have the ambition to see that 350,000 people grow in the coming years to many more."

Speaking of the Cabinet's upcoming meeting, he said "So I think this is an important issue for Ireland in terms of our economic future. That is why it is right that we all take the time and make a collective decision as soon as possible on that issue."

Meanwhile, Independent Alliance Minister John Halligan has warned that there are serious obstacles to agreeing a compromise on the EU’s ruling  that  Apple must pay €13bn in back taxes.

Mr Halligan said he wanted to see a Dáil debate on the issue – ahead of a Government decision on whether to lodge an appeal.

The Waterford TD said Apple – like everyone else - should pay their fair share of taxes.

The Cabinet meets tomorrow in efforts to agree a compromise allowing Finance Minister Michael Noonan to lodge an appeal to the EU Courts in Luxembourg. Mr Noonan insists that Ireland did not use the tax system to give Apple an unfair advantage in contravention of Brussels fair competition laws.

But the three Independent Cabinet members, Shane Ross and Finian McGrath of the Independent Alliance, and Independent Minister Katherine Zappone, have refused to back Mr Noonan’s appeal proposal.

The Cabinet meets again tomorrow in efforts to make a decision. But Mr Halligan’s insistence on a Dáil debate before a Government decision throws up further difficulties.

“I think a Dáil debate, say over two days, may actually sway the Government decision,” Mr Halligan told RTE radio’s News at One.

Fine Gael are prepared to agree a Dáil recall – but only after the Government approves an EU Court appeal.

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