The EC is taking the Government to the European Court of Justice for failing to recover back-taxes from Apple
The Taoiseach has labelled the decision to refer Ireland to the European Court of Justice as “unwarranted” and “unnecessary.”
Leo Varadkar was speaking in the Dáil after the European Commission said Ireland has been too slow in collecting €13bn in back taxes from Apple.
The Commission concluded in August 2016 that Ireland's tax benefits to Apple were illegal under EU state aid rules.
The ruling is being appealed by the Irish Government and by Apple.
This afternoon however, the European Commissioner for Competition, Margrethe Vestager warned that Ireland has failed to make “sufficient progress” in recovering the money, over a year after the original EC ruling.
“That is why we have today decided to refer Ireland to the EU Court for failing to implement our decision," she said.
Appearing before the Oireachtas in January, Ms Vestager said the "large majority" of the unpaid taxes were owed to Ireland.
The deadline for Ireland to implement the decision was January 3rd 2017.
In the Dáil this afternoon the Taoiseach insisted steps were being taken to set up an Escrow account to hold the money while the appeals are ongoing:
“The government notes the announcement of Commissioner Vestager this morning,” he said. “It is a decision that we disagree with.”
“We believe it is wholly unnecessary and very much unwarranted at this time.
“We profoundly disagree with the European Commission’s interpretation of state aid rules.
“It is our view that tax is national competence; it is a matter for this parliament, not a European matter.
“This is of course something that is already on appeal to the European Court of Justice.”
He said authorities were making arrangements to recover the money from Apple, adding that the National Treasury Management Agency was managing the process:
“They have tendered for fund managers to set up an Escrow account and someone to manage the money until the European Court of Justice decides who it belongs to,” he said.
“I am aware that there is a budget next week and it is very important to say that this is not money that could be spent this year or next year solving any of our problems.”
Ms Vestager said Europe was working to enforce state aid rules to prevent select companies gaining unfair advantage:
She has also ordered Amazon to pay €250m in back taxes to Luxembourg:
“The point of having common European rules on state aid is of course to ensure that companies compete on their merits,” she said.
“These rules that we have in common; they prevent member states from giving unfair advantages to select companies.”
This morning, the Department of Finance insisted “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.”
"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 department said Ireland has "never accepted the commission’s analysis in the Apple state aid decision,” however on The Hard Shoulder this evening, economist Dan O’Brien warned that he expects the State to lose its appeal:
“The ECJ is a court and it will decide on its view of the legal basis whether the government is right or whether the Commission is right,” he said.
“My hunch is that it will come down in favour of the Commission.”