The €13 billion Question Has Been Asked

Published: August 30, 2016
Categories: News Article, Employment, Euro/Finance

The decision by the EU Commission that Apple should repay €13bn to the Irish exchequer has profound implications for Ireland, for the EU, for foreign direct investment into the EU and, in that context, for Brexit.

“Should we take the money and run or go to the Court of Justice for a final decision, those are the hard choices we now face.  This was stated by Independent MEP Marian Harkin responding to the €13bn fine on Apple announced by the European Commission.

Should Ireland challenge this decision?  Because of its massive impact, I believe the Court of Justice should be the final arbiter in this case as it would set in stone all future EU policy decisions on State Aid and the taxation of multinationals.  We must study the decision carefully, but it’s important to remember that this is just the view of senior Commission officials, their legal advisers and the Commissioner herself.  It needs to be tested to see if it is soundly based as its implications are so far reaching.  

We could find ourselves in three years time where the British Government could give State Aid of any kind to companies in the UK and Northern Ireland, while our hands might be literally tied by this ruling.  That issue alone, is huge for Ireland.

Multinationals must pay their fair share of tax and the EU Parliament has already been to the forefront on this issue with legislation calling for the sharing of information between EU countries and country by country reporting.  However, we need to remember that the taxation of multinationals is a global issue and Europe must work with its partners to close off the loopholes rather than go on solo runs.  Yes, we need to lead, but we also need to bring others with us.

There are both reputational and hugely political issues at play here and we must recognise them for what they are.  Finally there is the carrot of €13bn being dangled in front of our noses.  We shouldn’t say no thank you and it is right that the money is set aside in an Escrow account while the issue is fully tested in the Court of Justice.  We should reach an agreement with the EU Commission and the Court of Justice that this matter will be fast tracked because of its far reaching consequences.  We should insist, however, that the case be prioritised and that the Court rules on the matter within 12 months.  In the meantime we must fully assess the fallout of this critical decision by the European Commission.