‘We do not do tax deals’, says IDA Ireland CEO on EU Apple ruling

30 Aug 2016

IDA Ireland CEO Martin Shanahan

Ireland does not do tax deals, said IDA Ireland chief executive Martin Shanahan in response to the European Commission’s ruling that Apple must pay €13bn in back taxes.

“Ireland’s position has not changed – we do not do tax deals, and it’s simply untrue and a gross mischaracterisation of our taxation regime to say otherwise,” Shanahan said.

The European Commission’s Competition Commissioner Margrethe Vestager said that Apple must pay Ireland €13bn in tax plus interest for failing to pay adequate corporate taxes between 2003 and 2014.

‘The Commission’s decision appears to be internally contradictory and its basis flawed’

However, Apple CEO Tim Cook said that the EU’s claim “has no basis in fact or in law” and said that Apple will appeal the ruling, confident it will be overturned.

Likewise, Ireland’s Finance Minister Michael Noonan has described Vestager’s decision as “contradictory” and said Ireland has every intention of appealing the decision in European courts.

Shanahan pointed out that the Irish Government has again reiterated that Ireland did not give favourable tax treatment to Apple.

EU decision does not call into question Irish tax system or corporate tax rate

“Ireland has one of the most open, consistent and competitive taxation regimes in the world and, together with our other offerings in terms of talent, access to the European market and pro-enterprise policies, Ireland has been hugely successful in attracting foreign companies to establish and expand in Ireland. Over 300,000 people are employed directly or indirectly in FDI companies in Ireland.”

He said the Commission has acknowledged that the decision does not call into question Ireland’s general tax system or its corporate tax rate.

“This decision does not impact on Ireland’s value proposition and I believe that Ireland will continue to win investment and, in that light, we welcome Apple’s restated commitment to Ireland today, building on its significant presence here.”

Shanahan pointed out that Apple has operated continuously in Cork since 1980 and today they employ nearly 6,000 people across Ireland.

“The vast majority are still in Cork — including some of the company’s very first employees — now performing a wide variety of functions as part of Apple’s global footprint. Countless multinational companies followed Apple by investing in Cork, and today the local economy is stronger than ever.

“Ireland has been a full participant and to the forefront in international efforts to address Base Erosion and Profit Shifting (BEPS) and abides fully with OECD guidelines. Ireland has made necessary changes to its taxation regime as international tax rules have developed over the years.

“The Commission’s decision appears to be internally contradictory and its basis flawed.

“It is now clear that the Commission decision is likely to be appealed by both the company and the Irish Government – therefore, we will have to await a final outcome in this case,” Shanahan said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years