Taoiseach Simon Harris has said that the €14 billion in tax due to Ireland following the ruling against Apple cannot be used for day-to-day spending, adding that the Government will give careful consideration on how best to use the funds.
Apple this morning lost its fight against the European Commission’s ruling that it underpaid €13 billion in tax due to Ireland.
The European Court of Justice has set aside the judgment of the lower General Court, which previously overturned the Commission’s decision.
That lower court’s ruling overturned the commission’s 2016 original finding that Apple had underpaid taxes totalling €13.1bn due to Ireland between 2003 and 2014.
Following the commission’s original ruling, Apple had to pay €13.1bn in unpaid taxes plus €1.2bn in interest into an independent third-party administered escrow account.
The Department of Finance confirmed the value of funds in the third party or escrow account holding tax money owed by Apple is now €14.1bn.
The department said: “The full balance in the Fund, after fees and operational expenses are paid, will accrue to the State. These processes are likely to take at least 6 months.”
It confirmed that €455 million had been paid out to other countries.
In its original State aid decision, the European Commission said there was a possibility that other countries “may seek to tax some of the profits which the Commission were proposing to allocate to the Irish branches of the Apple companies”.
It noted that €209m was returned to Apple in 2019.
The department said it was not aware of any further claims by other countries on the Apple tax money.
It also confirmed that over €10 million has been spent so far on managing the Apple tax case.
It said that €10.3 million has been paid by various State entities over the course of the case.
The figure includes €4.2 million relating to the recovery process. The amount also includes legal fees, consultancy fees and what was termed associated costs.
The department said the total covers costs to summer 2024 and it is not possible to estimate a final figure for the process.
In a statement, Simon Harris said that the Government will consider how best to put “these funds to use”.
“Obviously, one-off resources cannot be used for day-to-day spending but careful consideration should now be given to how best to utilise this for Ireland and the needs of our country,” he said.
Mr Chambers said the judgment will not impact on planning for Budget 2025, which he said will continue to be framed by the Summer Economic Statement.
Transferring the money is a complex issue and will take months, he said, adding that he could not comment on the likelihood of other countries making claims on the money.
Minister for Public Expenditure Paschal Donohoe said he remains convinced that Ireland did not make tax arrangements with individual companies, but he respected the European Court of Justice ruling.
He added that the Government has made significant changes to Irish tax codes to bring it up to the standards of today.
Ireland does not give preferential tax treatment to companies, says Govt
In a statement noting the judgment, the Government earlier said its position has always been that Ireland does not give preferential tax treatment to any companies or taxpayers.
“The CJEU has found that the tax paid was insufficient and that a greater amount of taxation was required to be recovered. Ireland will of course respect the findings of the Court regarding the tax due in this case,” the statement added.
“Today’s judgment provides the final determination in this case and the process of transferring the assets in the Escrow Fund to Ireland will now commence in the manner prescribed in the Deed governing the operations of the Escrow Fund,” it said.
It also said the Apple case involved an issue that is now of historical relevance only – the Revenue opinions date back to 1991 and 2007 and are no longer in force.
Ireland has already introduced changes to the law regarding corporate residence rules and the attribution of profits to branches of non-resident companies operating in the State, it added.
“Ireland is an active participant in international tax discussions and has also made necessary changes to its taxation regime as international tax rules have developed over time,” the Government added.
Govt reckless in challenging Apple case – McDonald
Sinn Féin leader Mary Lou McDonald has accused the Government of gross recklessness and incompetence by challenging the Apple tax case.
“You couldn’t make this up. The parties of Government, those that lecture fiscal prudence to others, the same parties argued and sought to obstruct more than €13bn that the State was due coming into the public coffers.”
Ms McDonald said her party would spend the money on housing and infrastructure.
She said she was not concerned that the decision could have repercussions for Ireland’s foreign direct investment strategy, adding that the multinational sector chose Ireland for its education and talent base.
She added that if there was reputational damage for Ireland, it was inflicted by Fianna Fáil and Fine Gael.
Earlier, party spokesperson on Finance Pearse Doherty said Fine Gael and Fianna Fáil have “massive egg on their faces” as a result of the judgment.
He accused the Government of squandering public finances in defending the case, while taking the case also increased reputational damage to Ireland.
He said that Apple was in its right to defend and appeal the European Commission decision, but added – in his view – that it was not right for the Irish State to defend a scenario where a company registered in Ireland made €104 billion in profit but paid no tax.
Speaking on RTÉ’s Today with Claire Byrne, Mr Doherty said he always believed the judgment was inevitable and that the money could have been put to good use in 2014.
“In 2014, this €13bn would have built tens of thousands of social and affordable houses right across the State. It could have transformed our society,” he added.
Apple decision ‘right and ethical’
Labour’s spokesperson on Finance, Public Expenditure and Reform Ged Nash described the judgment as a landmark one.
Mr Nash said the Minister for Finance must make a statement outlining the wider implications of the judgment for Ireland’s corporation tax system and for the country’s industrial policy.
“Labour has today formally requested a full Dáil debate on this pressing matter when the Dáil returns next Wednesday. This judgment vindicates Labour’s early call, for which we were roundly criticised by both Fine Gael and Sinn Féin, to sign up to both pillars of the OECD corporation tax reform process,” he said.
“This was the right and ethical thing to do, and it gives investors the certainty they need into the future. In fact the process to prevent profit shifting and the minimisation of tax bills with reference to intellectual property kicked-off with reforms brought in in Ireland in 2014,” Mr Nash said.
“This is a genuine windfall for the State. Much of the resources need to be directed to housing and infrastructure development,” he added.
Article Source – Apple tax funds ‘cannot be used for day-to-day spending’, says Tánaiste – RTE
