The Republic of Ireland’s cabinet, agreed to appeal the decision on the European Commission’s decision that Ireland granted undue tax benefits of up to 13 billion euros ($15 billion) to Apple. / AFP PHOTO / PAUL FAITH
DUBLIN, Ireland (AFP) – by Douglas DALBY
Ireland’s fragile minority government agreed Friday to recommend an appeal against the EU’s tax ruling on Apple but said it was recalling parliament early to debate the issue.
The deal overcomes a split in cabinet surrounding the 13 billion euros ($15 billion) plus interest that the EU says Apple owes in back taxes, putting Ireland at the centre of a row between Europe and the United States.
Apple chief Tim Cook has urged the government to appeal against the ruling to secure future investments but opinion polls have shown public support for Ireland taking the money and spending it on social services.
“The government has decided unanimously to bring an appeal before the European courts to challenge the European Commission’s decision on the Apple state aid case,” Finance Minister Michael Noonan told reporters.
“I believe that there are some very important principles at stake in this case and that a robust legal challenge before the courts is essential to defend Ireland’s interests,” he said.
“The full amount of tax was paid in this case and no state aid was provided. Ireland did not give favourable tax treatment to Apple,” he said.
But Mary Lou McDonald, deputy leader of the opposition Sinn Fein party, said allowing Apple to avoid a tax payment was an “obscenity”.
“It’s an agenda that has nothing to do with standing by the people of Ireland. What it demonstrates is an absolute disregard and disdain for citizens, fair play and tax justice,” she said.
Parliament will meet for a special session next Wednesday, ahead of its scheduled return on September 27, officials said.
In Brussels, a European Commission spokesperson said: “The Commission will defend its decision in court”.
‘In the public interest’
Earlier this week, three independent Irish ministers propping up the government had refused to back the appeal and said they wanted greater transparency about corporate tax arrangements for multinationals.
But after the cabinet meeting, Shane Ross of the Independent Alliance said he and his colleague Finian McGrath had supported the government position.
“We felt there was a state of urgency because there was uncertainty out there in the markets amongst some multinationals,” he said.
“We were persuaded by the argument that it was necessary to clear up that uncertainty as soon as possible,” he said.
Katherine Zappone, another dissenting independent, confirmed she too had agreed to the appeal “in the public interest”.
The back taxes that the European Commission has determined the US tech giant owes are equivalent to around five percent of Ireland’s gross domestic product and almost all of its annual health budget.
‘Do the right thing’
“Ireland is caught in a dispute between the EU and US over which it has little control,” the UK-based Financial Times newspaper wrote in an editorial.
“Bowing to the commission’s ruling would… be a tacit acknowledgement that there has indeed been something rotten in the low-tax regime that Dublin operates to attract multinationals,” it said.
Ireland’s minority government relies on the support of the main opposition Fianna Fail party, which is likely to back the appeal in parliament.
Some lawmakers believe Ireland cannot afford to undermine its tax policies, one of the main planks of a highly successful inward investment strategy that has consistently attracted the world’s top tech and pharma multinationals over the past three decades.
Others say Ireland should take the money and spend it on services or build more affordable homes to deal with a housing crisis.
Ireland has two months to lodge an appeal against the ruling.
Fianna Fail technology spokesman James Lawless said earlier that Ireland had to appeal but admitted this would be difficult to explain to voters who wanted the money “gift-wrapped on their doorstep”.
“I would be more interested in preserving Ireland’s sovereign tax status,” he said, adding: “Ireland has been caught in the crossfire between the United States and Europe”.
On Thursday, Cook turned up the heat saying he believed the Irish government “would do the right thing”.
“It is important the government stands strong on that because future investment for business really depends on a level of certainty,” he said.