04 Oct 2017 | 11.28 am
Government Blasts EU Over Apple Cash Row
Vestager hauls Ireland before European Court of Justice
04 Oct 2017 | 11.28 am
The Department of Finance has reacted angrily after the European Commission referred Ireland to the European Court of Justice for failure to recover allegedly illegal tax benefits from Apple worth up to €13 billion.
The Commission decision in 2016 concluded that Ireland’s tax benefits to Apple were illegal under EU State aid rules, because it allowed Apple to pay substantially less tax than other businesses.
Commissioner Margrethe Vestager (pictured), in charge of competition policy, commented: “More than one year after the Commission adopted this decision, Ireland has still not recovered the money. We of course understand that recovery in certain cases may be more complex than in others, and we are always ready to assist. But Member States need to make sufficient progress to restore competition. That is why we have today decided to refer Ireland to the EU Court for failing to implement our decision.”
The Commission’s deadline for Ireland to implement its decision on Apple’s tax treatment was January 2017. Ireland has told the Commission that it is planning to place the contested funds in an escrow account by March 2018.
In a statement the Department of Finance said: “Ireland has never accepted the Commission’s analysis in the Apple state aid decision. However, we have always been clear that the government is fully committed to ensuring that recovery of the alleged Apple state aid takes place without delay and has committed significant resources to ensuring this is achieved.
“That is why it is extremely disappointing that the Commission has taken action at this time against Ireland. Irish officials and experts have been engaged in intensive work to ensure that the state complies with all its recovery obligations as soon as possible, and have been in constant contact with the European Commission and Apple on all aspects of this process for over a year.
“It is extremely regrettable that the Commission has taken this action, especially in relation to a case with such a large scale recovery amount. Ireland has made significant progress on this complex issue and is close to the establishment of an escrow fund, in compliance with all relevant Irish constitutional and European Union law.
“The work on the establishment of the escrow fund to deal with the unprecedented recovery amount will continue, notwithstanding the fact that Commission has taken this wholly unnecessary step.”
If the ECJ decides that Irish authorities are violating EU state aid rules, the court can impose substantial penalty payments.
Fianna Fáil finance spokesman Michael McGrath described the government’s approach to the issue as incompetent. “This does not help Ireland’s cause as we seek to defend our autonomy over corporation tax,” he said. “While Fianna Fáil fundamentally disagrees with the Commission’s state aid ruling last year, the ruling has to be fully respected while the appeals process runs its course.
“This means the government should have moved without delay to collect the €13 billion plus interest from Apple and place it in an escrow account. At a time when several EU member states have Ireland’s corporation tax rate and system in their sights, today’s development is not helpful to Ireland’s cause and will embolden those who seek to portray us as engaging in harmful tax competition.”