It is no surprise that the Irish government is kicking back hard against a Brussels finding that it gave Apple up to €13bn (£10.8bn) in illegal state aid via a secret, sweetheart tax deal spanning many years.
These are the kind of deals, after all, that have become the lifeblood of Ireland’s economy over the past three decades. Inward investment has flowed as the country set out its stall as the go-to place for multinationals looking for loopholes that allow them to spirit their taxable profits off to tax havens in the Caribbean and elsewhere.
In August, however, the party abruptly stalled. The European competition commissioner, Margrethe Vestager, announced a record-breaking state aid decision in relation to Apple. It must now pay an enormous bill for back taxes.
Some in Ireland had initially suggested a massive, unexpected windfall was nothing to complain about. But the finance minister, Michael Noonan, was quick to put them straight. “To do anything [other than appeal against the Brussels decision] would be like eating the seed potatoes and destroying the future for people for short-term advantage now,” he said.
On Monday he unveiled details of Ireland’s appeal, sent to the EU courts in Luxembourg last month. In a nutshell, Noonan simply refuses to accept that Apple’s corporate arrangements in Cork, which have regularly generated two-thirds of the global profits for the US company, have been in any way exceptional.
Nor is it at all odd that these handful of Cork-registered companies have been able to claim “stateless” income – that is, their profits are beyond the jurisdiction of any state to tax.
Apple is expected to take a similar line when it lodges its own appeal: that no rules have been broken, and that the company is the victim of a political attack that retrospectively and unreasonably unpicks tax treatments which have endured for decades without objection.
Having come so far, and with so much at stake, it is hard to imagine Apple and Ireland throwing in the towel and conceding in the EU courts. That said, with each fresh round of public disclosures about the iPhone maker’s tax structure, it looks more and more indefensible on any measure.
At this rate, US critics of Vestager’s meddling may well have cause to reassess. Instead of calling the commissioner out for overreaching her powers, they may instead question the inaction of the Inland Revenue Service. Why is it, after all that the IRS is pursuing Amazon and Facebook through the US courts over their European tax structures, but have never challenged Apple?
