EU investigation represents serious threat to Ireland’s inward investment strategy – McGrath

The formal investigation announced by the European Commission today into Ireland’s corporation tax treatment of Apple could prove to be very damaging to the Irish economy and ultimately cost jobs, according to the Fianna Fáil Spokesperson on Finance Michael McGrath.

Deputy McGrath said the Irish government must robustly defend Ireland’s corporation tax regime and how it interacts with multinational companies.

Deputy McGrath stated, “While the investigation announced today relates specifically to the question of whether Ireland’s tax treatment of Apple breaches EU State Aid rules, an adverse finding against could have much wider implications for multinationals in Ireland and ultimately cost jobs. It has been clear for some time that many other European countries have viewed Ireland’s success at attracting multinationals with considerable envy. Our competitors will hope that today’s announcement is the start of the unravelling of our ability to secure multinational investment.

“It is absolutely vital that the government uses every means at its disposal to protect our economic interests. Apple currently employs over 4,000 people at its European base in Cork. The government must protect these jobs and every other multinational job in the country.

“The truth is that the disparaging references to Ireland’s corporation tax regime during committee hearings at the US Senate and the House of Commons have caused significant reputational damage to our tax system. As recently as last week, we had the Californian Governor passing jokes in the presence of An Taoiseach about Ireland’s corporation tax system and ‘creative accounting’. The government has not treated this issue with the seriousness it deserves since the initial European probe was launched nine months ago. The government has been complacent and dismissive and has not allayed the concerns of the EU to prevent a formal inquiry.

“The widely held concerns about the amount of tax multinationals pay are best dealt with on an agreed basis internationally. Ireland can and should play its part in this process through engagement with the initiative at OECD level. The bottom line is that we need to have certainty about our corporation tax system in order to secure the multinational jobs currently in Ireland and to continue to attract inward investment into the country. The government now needs to urgently address the technical issues raised as part of this EU investigation and must insist that the investigation is concluded quickly and not allowed to drag on over an indefinite period of time. Otherwise, the only beneficiaries will be the countries Ireland competes with for international investment.”