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27/09/2016

Irish cabinet decides to fight EU on Apple tax

Global Europe

Irish cabinet decides to fight EU on Apple tax

The Irish government has agreed to appeal against the Commission's €13 billion fine.

[Reuters]

Ireland’s cabinet agreed today (2 September) to join Apple in appealing against a multi-billion-euro back tax demand that the European Commission has slapped on the iPhone maker, despite misgivings among independents who back the fragile coalition.

A government spokesman said that following the cabinet’s decision, it would ask parliament to endorse the legal challenge on Wednesday next week.

EU says Apple must repay €13 billion over ‘illegal’ Irish tax deal

The European Commission said on Tuesday (30 August) that US tech company Apple must repay €13 billion in back taxes after ruling that a series of Irish tax deals were illegal.

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Finance Minister Michael Noonan has insisted Dublin would fight any adverse ruling ever since the European Union began investigating the U.S. tech giant’s Irish tax affairs in 2014, arguing that it had to protect a tax regime that has attracted large numbers of multinational employers.

But at an earlier cabinet meeting on Wednesday (31 August) he failed to persuade a group of independent lawmakers, whose support is vital for the minority government, to agree to fight the ruling that Apple (must pay up to €13 billion in tax to Dublin.

Apple ruling divides Irish cabinet

Ireland’s fragile minority government meets today (2 September) for crunch talks to resolve a stalemate after the EU ruling on Apple that has divided the country. In the meantime, the European Socialists slammed the critics of the ruling.

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Ireland’s main opposition party, Fianna Fáil, also favours challenging Brussels. The government should therefore easily win parliamentary support to appeal against European Competition Commissioner Margrethe Vestager’s ruling that Apple’s low tax arrangements in Ireland constitutes illegal state aid.

Apple, anxious to defend its own interests, has already said it will lodge an appeal. For Fine Gael, the main Irish coalition party, a broader principle is at stake. It wants to take on Brussels to safeguard Ireland’s decades-old low corporate tax policy that has drawn in multinationals such as Apple, creating one in 10 jobs in what was once an impoverished country.

Commission’s Apple tax clawback violates Irish sovereignty, claims Dublin

The European Commission today (30 August) hit Apple with a €13 billion clawback of unpaid taxes in Ireland, but Dublin branded the move a violation of its sovereignty and both the country and the US tech giant immediately said they would appeal the decision.

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The Independent Alliance, a group of five lawmakers, had called for a review of how tax is collected from Ireland’s large cluster of multinational companies before it considers a challenge.

“We are very, very keen that from now on multinationals should be seen to be paying their fair share of tax. That’s very important that comes out of this meeting today,” Transport Minister Shane Ross of the Independent Alliance told reporters before the cabinet meeting.

A failure of the Alliance to come on board would have cast doubt on the government’s survival prospects. Dublin has just over two months to lodge an appeal.

Some Irish voters are astounded that the government might turn down a tax windfall equivalent to what it spent last year funding the struggling health service, and the left-wing Sinn Fein party has led attacks from the opposition.

Apple chief executive Tim Cook warned on Thursday that if the Dublin government did not join it in appealing, this would send the wrong message to business in a country whose economic model depends in part on companies like his.

Vestager under fire from predecessor Kroes over Apple ruling

Ex-Commissioner for Competition Neelie Kroes slammed the EU for concluding that Apple owes Ireland €13 billion, calling the decision “fundamentally unfair”. The European Commission replied that Kroes was wrong, and that she was speaking on behalf of Silicon Valley.

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