OPINION: Not appealing the Apple ruling is accusing Revenue of going rogue

Vincent Wall on the European Commission's ruling and Ireland's dithering politicians...

To borrow a phrase, what a load of political crap. No, I don’t mean the motivation attributed to the European Commission by Apple boss, Tim Cook, who may have got to the phrase just before me and who may be expressing a reasonable point of view.

I mean the antics of our very own Minister for Transport, Shane Ross and those other members of Government who continue to fret about the impact of hugely significant issues of national interest on their own little backyards.

There is no choice here for a signed-up member of the Cabinet...

The European Commission has accused Ireland, not of operating an unfairly low corporate tax regime generally, nor even of operating a corporate tax regime that unfairly favours large, profitable multinationals in general.

No, the Commission has adjudged that the Irish State, through the agency of its independently-governed tax collection agency, the Revenue Commissioners, deliberately and in return for employment creation in Ireland, offered Apple a secret, selective and illegal sweetheart tax arrangement (not once, but twice).

The Government has no option but to appeal that decision. Otherwise, dissenting ministers are declaring, by implication if not overtly, that the Revenue Commissioners went rogue, were no longer bound by the laws of the Oireachtas, and may well have agreed secret illegal arrangements with other corporations as well.

The logic of that position is that we should drag all senior management within the Revenue Commissioners from 1991 through 2007 before a Tribunal as quickly as possible to establish why, how and on whose behalf they followed this illegal course.

So wise up lads, or get off the pot.

Don't ask don't tell

This is not to argue that from a moral or philosophical point of view, our tax laws and the basis for them, have come up smelling of roses this week.

They haven’t been particularly fragrant for some time. If we’re honest, we’ve only begun to change them because of external pressure from the likes of the OECD, political outcry in the United States, and the effect on public opinion of tax-related wiki leaks.

We may have followed our tax laws to the letter (or else get those Tribunal wheels in motion), but we also must have known that the “Head Office” to which billions in Apple Sales International’s profits were channelled through Ireland, was a Stateless entity.

On that basis, and despite Tim Cook’s protestations that Apple will ultimately have a 26% corporate tax rate when its deferred US taxes come home to roost, our tax authorities and political leaders knew Apple wasn’t just using Ireland as a tax channel for this key corporate branch, because they liked Cork.

Maybe it can be argued that was all in the past and that we are adapting to new standards of tax morality at the same pace as the Americans, the French, the Dutch and other Western jurisdictions that are quick to throw stones but whose own tax glasshouses have also been less than transparent over the years.

Maybe - but we need to be almost as mindful of our public relations image as a nation as we are of the integrity of our tax laws and agencies.

So, we have no option but to appeal the Commission’s decision on points of law, but we can also soften our messaging by agreeing publicly with one particular aspect of the Commission ruling. Our tax laws hold that we can only raise corporation tax here on economic activity that took place in Ireland.

So, why not join with the Commission in encouraging other European countries to seek to reclaim those profits generated by Apple Sales International’s sale of Apple products in their jurisdictions? Our position is that we couldn’t tax those profits, not that they couldn’t be taxed elsewhere.

It may not be a welcome message in Washington, which sees Apple’s deferred taxes as belonging primarily to the US; it may not please Tim Cook for whom it would make life more complicated, but it would at least suggest that while we cannot re-write history in terms of our tax laws, we understand other countries have a legitimate right to claim some of the Apple pie on behalf of their citizens.