Colette Browne: Ireland might win Apple tax legal case, but morally it's indefensible
The European courts may ultimately decide that Apple doesn't owe Ireland €13bn plus interest, but what's not contested is that this country has knowingly facilitated tax avoidance on an industrial scale.
It seems that every Irish financial scandal, from Anglo to the Apple tax ruling, can be summarised in one pithy sentence: figures were invariably pulled from the blue.
That, essentially, is the charge that has been levelled by the European Competition Commissioner against the Revenue Commissioners.
When it was deciding how profits, generated in two Irish-registered Apple subsidiaries, should be taxed, it did so "on the basis of Irish Revenue's discretion in the absence of objective criteria related to the tax system".
According to the commission, one such tax ruling, in 1991, "appears to have been arrived at through negotiation and to have depended on employment considerations".
Embarrassingly, when the commission asked the State and Apple to provide some objective evidential basis - like, profit allocation or transfer pricing reports - to justify these tax rulings, it was told that the dog had eaten their homework.
"It was only after the commission adopted its opening decision that Ireland and Apple each produced ad hoc profit allocation reports, prepared by PwC and [Apple's tax adviser] respectively, to justify the profit allocation methods endorsed by the contested tax rulings ex post facto," it witheringly notes.
Ireland and Apple, for their part, state that OECD guidelines on profit allocation were only set out in 2010 and have no legal force in this country. The commission, therefore, is penalising Ireland for not applying non-binding financial rules that didn't exist at the time.
Also undermining the commission's case is the fact that, having spent 130 pages outlining why the so-called stateless subsidiaries should be tax resident in Ireland, it then proceeds to suggest Apple can reduce its bill to the Irish Exchequer by retrospectively diverting monies to the US or allocating sales in other EU countries.
Given US president-elect Donald Trump has promised to introduce a corporate tax repatriation holiday, in which overseas profits would temporarily be taxed at 10pc instead of 35pc, it's likely that €13bn lump sum is going to rapidly shrink as Apple repatriates much of it back to the States.
While accountants and tax lawyers can look forward to a bumper few years as they duke it out in Europe over this ruling, one salient point remains: Ireland was complicit in Apple's grotesque tax avoidance, which saw it pay just 0.005pc tax in 2014.
In fact, the loophole that allowed Apple to avoid so much tax - an anomalous provision that allowed Irish-registered companies to remain stateless for taxation purposes - was only closed in 2014, more than 20 years after Apple first started using it.
Given the tens of billions that were sloshing through Apple's subsidiaries every year, why is it that these massive amounts of money didn't ring any alarm bells with the authorities in Ireland?
Or, as is more than likely the case, were we happy to gorge ourselves on the crumbs falling from Apple's Byzantine tax structures even if it meant other countries' tax coffers were starved?
The inclusion of Ireland in yet another list of notorious tax havens, this time coming in sixth in a list of the world's 15 worst tax havens published by Oxfam last week, suggests the latter.
Ireland isn't the only rapacious little European country that's happy to facilitate aggressive tax avoidance by multinationals at all costs.
The LuxLeaks scandal, in which thousands of pages of secret tax deals agreed among multinationals and tax authorities in Luxembourg were leaked in 2014, revealed that hundreds of corporations had lowered their effective tax bills to less than 1pc.
While EU leaders put on a great show of feigning outrage at the time, the only people to face charges after the revelations were the whistleblowers who leaked the information and the journalist who reported it.
Last week, in a retrial, two former PwC employees, who leaked the information because they wanted the world to know the kind of grimy deals that were being done behind closed doors, were given suspended sentences of 12 and nine months.
French journalist Edouard Perrin was acquitted of all charges, but has lived with the case hanging over him, and the prospect of a jail sentence being imposed, for the past two years.
In the US, it is likely Mr Perrin would have won a Pulitzer for his scoop. In Europe, he was dragged through the courts.
While EU leaders may publicly talk about the need for tax justice, the message that has been sent from the LuxLeaks debacle is that those who expose wholesale tax avoidance, and not the companies that engage in it, will be punished.
If politicians across Europe are wondering why populist political parties are suddenly in the ascendancy, they should look no further than LuxLeaks - which revealed that as austerity was being mercilessly enforced across Europe, sweetheart deals were simultaneously being cut with multinationals to facilitate mammoth levels of tax avoidance.
Irish politicians may well find themselves subject to this populist backlash as they try to negotiate tough new pay deals with public sector unions, or impose a new water charge on the populace, and have the €13bn Apple ruling thrown back in their faces.
It's not just the Apple ruling that suggests taxes are reserved for the little guy. Vulture fund Cerberus paid just €1,900 tax on €77m in profit last year - a tiny fraction of the tax contribution of the average industrial worker.
After the Apple tax decision eventually winds its way through the European courts, it may be that Ireland can successfully defend its tax treatment of the company. However, this will just be a legal victory. Morally, we are bankrupt.
It is true that Ireland alone can't solve aggressive global tax planning by corporations, but we could act proactively to close loopholes in our own jurisdiction that allow corporations to game the system instead of allowing them to fester.