Irish government will appeal EU ruling that Apple owes it $14.5 billion in taxes

Take your 13 billion and…

That was the de facto message from the Irish government to the European Commission today after the cabinet agreed to appeal the Commission’s ruling that technology giant Apple owes the Irish taxpayer €13bn, or roughly $14.5 billion – plus accrued interest.

The decision, according to an RTE report, was taken after a half-hour cabinet meeting “that headed off the danger of a rift.”

Apple had already signaled its intent to launch an appeal.

The RTE report stated that Independent Alliance ministers Shane Ross and Finian McGrath, and independent minister Katherine Zappone, had initially baulked at backing an appeal, calling instead for more clarity about multinational tax arrangements in Ireland as well a special Dáil debate.

Fine Gael ministers, however, argued that an appeal had to be lodged to challenge a ruling that had deep implications for inward investment.

In the end, it was agreed to file the appeal, a process that is likely to be a lengthy one.

The terms of the appeal will now be drafted by the attorney general and the Dáil will return early from its summer recess to debate the issue next Wednesday.

That is certain to be a vigorous debate as some opposition parties and TDs have been urging the government to take the tax windfall and spend it on domestic programs.

The Anti-Austerity Alliance, for one, immediately made its view clear with a statement that read in part: “The Anti-Austerity Alliance has condemned the decision of the government to lodge an appeal against the decision of the EU Commission that Apple owes €13 billion in unpaid taxes.

“The decision which will see the government lodge an appeal, alongside Apple, against the ruling is this government’s bank guarantee moment.

“It is putting the interests of big business, in this case a major multinational rather than banks, before the interests of ordinary people.

The government will waste public money taking a case to prevent a potential windfall of billions which could be used to dramatically change the lives of hundreds of thousands of people.”

The cabinet did agree a Dáil motion which would see an independent expert review the Republic’s corporation tax system.

The motion, RTE reported, also states that the government should appeal the Apple ruling on the grounds of defending the integrity of the tax system, provide tax certainty to businesses, and to challenge the encroachment of EU state aid rules into the sovereign member states competence to set its taxation.

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The draft motion also states that no company or individual should receive preferential tax treatment.

"It has been a difficult few days for everybody but we have kept our eyes on two things. One is that the multinationals provide jobs to the economy, and secondly the very important principle in the motion that multinationals should pay a fair rate of tax from now,” said Independent Alliance minister, Shane Ross.

The current Irish government is a majority administration comprised of Fine Gael and the Independent Alliance grouping.

The government runs with the backing of additional independents and what is currently the largest opposition party, Fianna Fáil.

Minister for Children, Katherine Zappone, who is U.S.-born, said the best way to secure any money for Ireland was through an appeal because to do otherwise would only end in prolonged delays.

She described the original tax deal with Apple as unethical, but said the government had now agreed to transpose EU directives on more transparent tax policies.

“Ireland is turning its back on a massive tax windfall from Apple,” was a CNN headline reporting the cabinet decision, a move that will be making more headlines in more parts of the world than a typical Irish government initiative.

As recently as 2010, the CNN report noted, Ireland was bailed out by the EU and International Monetary Fund.

“The extra tax billions would go a long way at a time when Irish officials are worried about the impact of Brexit on their economy.

“But multinationals such as Apple have created thousands of jobs in Ireland, and many are worried that the flow of foreign investment could be hurt if the government enforces the EU's retroactive tax demand.”

Ireland is an attractive location for multinationals for a number of reasons, one of them being its low 12.5 percent corporate tax rate.

That rate has been subjected to strong criticism from other EU members and the U.S. though some countries, notably the United Kingdom, have lately initiated moves aimed at lowering their corporate tax rates.

Northern Ireland is in line to introduce a tax rate identical to the Republic in 2018, though June’s Brexit vote has resulted in considerable uncertainly on a variety of fiscal and economic fronts.