Size of Apple tax windfall leaves some TDs uncertain on appeal

The scale of the European Commission's €13 billion ruling in the Apple State aid case unnerved some members of the Independent Alliance, the group of TDs which form part of the Government.

The disclosure of the amount completely threw the group, according to one of the members, and created an element of doubt as to whether or not it would support a Government appeal.

The five Independent TDs in the group had met Minister for Finance Michael Noonan on Monday in advance of Tuesday's decision.

They were extensively briefed by the Minister and his officials about the implications of the ruling. The meeting lasted 1½ hours and the Independents were also provided with a comprehensive briefing paper.

In a private meeting that afternoon, there was strong differences of opinion as to how they would respond to the adverse ruling. Some of the TDs felt uneasy about supporting an appeal against the decision when they had been very vocal opponents of very low rates of corporation tax when in Opposition.

However, most were reassured by Mr Noonan, who indicated to them the Government’s estimate was that the ruling would involve Apple having to pay between €7 billion and €8 billion in back taxes.

Most of the group were outside Dublin on Tuesday but they spoke frequently by telephone.

A short statement issued on its behalf stated: “Members of the Independent Alliance are shocked by the European Commission’s decision that Apple owes €13 billion in taxes to the Irish State.

“We are reviewing the commission’s statement issued today. We will consult further with Minister Noonan, his officials, Revenue, and our own independent experts.”

A spokeswoman confirmed on Tuesday night that there had been ongoing contacts with Department of Finance officials and the group had consulted with a number of people with tax expertise. It declined to identify who they were.

With mounting pressure from the Opposition to retain the €13 billion, an Independent source accepted that it would take a big "political hit" if it were to support Fine Gael. However, the source added that the alternative could have very serious repercussions for the survival of the Government.

Quandary

A former member of the alliance Michael Fitzmaurice said the decision threw up an interesting quandary for its leader Shane Ross, who has been outspoken in the past about tax avoidance measures by multinationals in Ireland.

As of Tuesday night, the group had yet to take a decision on its position, even though the indications were it would not oppose an appeal in the end.

The five TDs are expected to hold further conversations in advance of the Cabinet meeting, where Mr Noonan will present a memorandum recommending an appeal.

Minister of State at the Office of Public Works Seán Canney said the alliance would not be making any “rash judgements. We need to look at this carefully.”

Another Independent Minister Finian McGrath pointed out that even if Ireland were to keep the money, it would not be in a position to get it for three years. “We would love to get it,” he said but added: “We need to deal with the realities.”

The two other Independent Ministers, neither of them members of the alliance, indicated they would support the appeal. Denis Naughten told The Irish Times that Ireland needed to send a message in relation to foreign direct investment that when it set corporation tax rates it must defend them. He also said there was a question of the commission "overstepping the mark".

Katherine Zappone told reporters on Tuesday: "My understanding is that Revenue is saying yes, Apple paid the amount of tax that was requested, that was established by law, so I think that's not in dispute."