Thursday 19 September 2019

Who is right - the EU or Ireland?

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Stock picture

Colm Kelpie

Q: What is the European Commission saying about Apple and Ireland now?

A: The commission announced that it is taking the Irish Government to the European Court of Justice for failing to recover €13bn in back taxes from Apple, over a year after Brussels issued its decision.

The commission ordered the US tech giant in August last year to pay the unpaid taxes as it ruled the firm had received illegal state aid.

Q: Oh yes. I remember all the hullabaloo around that last year, but haven't heard much since. It seemed to drop off the radar?

A: That's the problem. The Government and Apple rejected the decision last year and both issued an appeal.

But the Government still had to collect the money, which it never did. The European Commission said this should have been done within four months of the decision. It said the company continued to benefit from an "illegal advantage" if the money ias not collected.

Q: Did the Government just ignore the call to collect the €13bn because it didn't agree with the decision in the first place?

A: Not so, says the Government. The Department of Finance said its officials and experts had been engaged in intensive work around the issue, but that the specific amount that had to be collected took time to pin down. It said it had been "in constant contact" with the European Commission and Apple on all aspects of this process for over a year. The department said "significant progress" had been made, and that it was close to the establishment of an escrow fund in which the money will be placed.

Q: So who is right?

A: There are questions over the length of time it is taking the Government to deal with this issue. The commission has a point. It has been more than a year now since the decision was issued. It was only in July that the National Treasury Management Agency issued a call for expressions of interest from investment managers to manage the escrow fund. That process was expected to take three months.

Ms Vestager told a press conference that in other cases of illegal tax advantages, such as Fiat in Luxembourg, Starbucks in the Netherlands and a Belgian scheme for 35 companies, the money was recovered even before appeals were exhausted. However, the amounts involved were far smaller. The commission said Ireland had made progress on calculating the exact amount due.

Irish Independent

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