Fianna Fáil Spokesperson on Finance Michael McGrath has called for the government to give the highest priority to ensuring that Ireland’s standing as a country with a transparent and OECD compliant corporation tax regime is fully defended.
He was speaking as the European Commission prepares to publish the preliminary findings of its probe into the affairs of Apple. The Financial Times is reporting this morning that Apple will be accused of “prospering from illegal tax deals with the Irish government”.
Deputy McGrath stated, “It is impossible to overestimate the importance of robustly defending Ireland’s reputation in this regard and asserting our right to maintain a competitive tax regime in accordance with EU law. We need to make it crystal clear that there are no special corporate tax rates in Ireland. Our tax rules are set out clearly in legislation and the rules are applied fairly to all companies regardless of size. Other EU countries not subject to as close scrutiny as we face do not have the same level of transparency. It will come as no surprise that there are many in the European Commission who would like to puncture a hole in Ireland’s corporation tax offering.
“We are still only at the early stage of the probe in to Apple’s tax arrangements. However it is likely to be a long drawn out investigation. In that context there is significant risk for us that the investigation in to a single company’s tax affairs could have a wider reputational impact on Ireland. The government must be proactive in ensuring we make the case to both European and US authorities that our tax rules are compliant with OECD requirements. It is worth remembering that companies such as Apple will eventually pay 35% corporation tax when their worldwide profits are repatriated to the US. It is United States tax law which allows them to defer this tax liability on an indefinite basis. The US could change this if they so wished but have declined to do so. In essence the deferral of tax by companies is facilitated by US law and not Ireland’s.
“There are 166,000 people employed in multi-nationals in Ireland. This is more than an abstract debate on international tax transparency. Real jobs and economic livelihoods are at stake. The expected report from the EU Commission should not precipitate any move in Budget 2015 pending the completion of the BEPS process and an overall agreement between all the stakeholder countries on how to proceed,” added Deputy McGrath.
