Ireland owed "large majority" of unpaid Apple taxes

The EU Competition Commissioner has appeared before the Oireachtas Finance Committee after ruling last year that Apple owed €13bn in unpaid taxes

Ireland owed "large majority" of unpaid Apple taxes

Margrethe Vestager, 31-01-2017. Image: Sam Boal / RollingNews

The European Commissioner that investigated Apple’s European tax affairs has insisted the vast majority of the company’s unpaid tax bill is due in Ireland.

Competition Commissioner, Margrethe Vestager has appeared before the Oireachtas Finance Committee after ruling last year that the US tech giant owed €13bn in unpaid back taxes.

This morning, the committee heard the interest due on top of the multibillion Euro invoice could amount to anything from €1.5bn to €6bn.

Ms Vestager told the hearing that while the Commission has provided a methodology for calculating the bill, it would be up to Ireland as a member state to "do the fine tuning and to get every detail of the calculation right."

The government and Apple have both appealed the ruling and deny the outcome of the report.

A number of Irish TDs have claimed the Commission is operating outside its remit and is interfering in Irish tax affairs.

Vast majority owed to Ireland

One of the grounds for the government’s appeal is that Ireland cannot be expected to act as a tax collector for all of Europe - however Ms Vestager insisted the majority of the money is owed to Ireland.

“My guess would be that the large, large, large majority of the taxes due would be due in Ireland,” she said.

In her opening remarks she said the Competition Commission investigations do not mean the commission is claiming any authority over tax systems - national or international.

She said the investigations, “do not affect the sovereign right of Member States to determine their own corporate tax systems, or to set their own tax rates.”

“They are simply about special treatment for certain companies.”

EU state aid rules

She made clear that EU state-aid rules exist in order to protect companies based in smaller countries. 

"I know that there is uncertainty, especially here in Ireland, about what the effects of Brexit will be," she said.

 

"What I think is not in doubt is that the single market - even with 27 members - will continue to be the basis of our prosperity and that it must - and will - remain a market where every company and every country, big or small, is treated equally.

 

The EU Commission originally decided to investigate after Apple told the US Senate it had a “tax incentive arrangement” with Ireland.

 

In their ruling, the watchdog found that Apple paid just €50 tax on every €1m of profit earned outside the US.

 

Both the company and the government have since denied that there was any special tax deal. 

 

No stone unturned

Following the hearing, Sinn Féin finance spokesperson Pearse Doherty said it is now “absolutely clear” that the government should not proceed with the appeal against the decision.

“Point after point put up by Fine Gael and Fianna Fáil around so called fantasy money, Ireland acting as a tax collector for the world and arguments around selectivity and tax sovereignty were not only dismissed but destroyed by evidence from the commissioner,” he said.

“It’s is clear from the Commission’s 130 page report, that they have left no stone unturned in arriving at the decision.

“The report is objective, well researched and the authors have shown a clear understanding of the minutia of Irish tax legalisation.”

He said the scandal centres on a “dodgy deal” whereby Apple were able to decide what tax they would pay “on an arbitrary basis,” rather than through established Irish tax legislation. 

“It beggars belief that the government would fight this case, which is clearly watertight,” he said.

“The government should immediately stop wasting tax-payers money on the appeal process, from which the only winners will be the lawyers and accountants paid by the State.

Speaking ahead of the hearing this morning Finance Committee chairperson John McGuinness warned that Apple “employs thousands of people in Ireland and this ruling could have far-reaching implications for multi-nationals in this country.” 

Apple boss Tim Cook rejected an invitation to attend the committee hearings on the case