The multi-billion euro windfall expected from the final ruling in the Apple tax case will not change spending plans for next year to be set out in next month’s budget, the Government has insisted.
Both Minister for Finance Jack Chambers and Minister for Public Expenditure Paschal Donohoe have said the expected funds to flow into the exchequer as a result of the case will not alter the parameters of the Coalition’s last budget before the general election.
A landmark ruling by the Court of Justice of the European Union (CJEU) on Tuesday means the computing giant must now repay Ireland €13 billion in back taxes, a big legal defeat to both the Irish Government and the US technology giant. Mr Chambers said the escrow fund containing the money from Apple is currently in the region of €14 billion.
On the possibility of other countries seeking a portion of the funds Mr Chambers said it was not possible for him to comment on the likelihood of such claims. He said: “There have been some third country adjustments already made in the context of the escrow fund that was established. And what we’re going to do now, over the next number of months, the NTMA [National Treasury Management Agency] with Revenue, will bring a final determination on what the amount will transfer from the escrow fund to the Irish exchequer.”
Mr Chambers said “the current working assumption” is that the majority of the €14 billion will be available to Ireland while adding: “that’s subject to potential other third country adjustments so we can’t be absolute on that.”
He said the process of transferring the assets in the escrow fund to Ireland will start in the wake of the court ruling.
Mr Chambers added: “This is a complex process which is expected to take a number of months to conclude.
“The Government will need to carefully consider what is the best course of action to take with this revenue, and I will be engaging with the party leaders over the coming weeks on this matter.”
Both he and Mr Donohoe were clear that any windfall will not change budget spending plans.
Mr Chambers said “this will not impact on the parameters already set out for Budget 2025.
“The Summer Economic Statement published by Government in July has set out the available package for the budget, and Minister Donohoe and I will deliver Budget 2025 on October 1st in line with those parameters.”
Mr Donohoe said: “Budget 2025 will see a total of €105.4 billion euro in expenditure being made available for next year.
“The size of that budget will not be changing.”
He added: “It’s still the right level of spending for our economy.
“It gets the balance right between trying to support the development of our public services without leading to a return to inflation within our economy, but also funding that improvement in our public services with money that we are confident that we will continue to have in the future.”
Earlier Tánaiste Micheál Martin said the billions in funds will not be used for “day-to-day spending”.
The landmark ruling by the Court of Justice of the European Union (CJEU) on Tuesday means the computing giant must now repay Ireland €13 billion in back taxes, a big legal defeat to both the Irish Government and the US technology giant.
In a statement on Tuesday, the Government said it will “respect the findings” of the court.
The Department of Finance said the judgment provides the final determination in the case and that the process of transferring the money, which has been held in escrow, to Ireland will now begin.
A note circulated by the department within the Government said it will “now engage with the relevant parties such as Revenue and the NTMA to begin this process.”
Mr Martin said Ireland contested the European Commission’s argument “because we felt it was important to defend the integrity and independence of our economic strategy. But it was also to protect jobs.
“Every international company that chooses to locate in Ireland looks for certainty and that is the foundation stone of our industrial policy.
“The Government will now give careful consideration on how to use these funds in the best interests of the Irish people,” Mr Martin said in a statement.
The decision sparked a volley of criticism of the Government by Opposition parties, as well as calls to clarify what the wider implications of the judgment were for Ireland.
[ Apple’s €13bn Irish tax case timelineOpens in new window ]
Sinn Féin’s finance spokesman, Pearse Doherty, said the ruling was expected.”
“They [Fine Gael and Fianna Fáil] spent millions of euro of our money defending this, trying to prevent us getting €13 billion of taxes. And remember when they took this case in 2014, this €13 billion would have built tens of thousands of social and affordable houses right across the State,” Mr Doherty told RTÉ radio’s Today with Claire Byrne show.”
[ Why does the Government not want the €13bn in back taxes from Apple?Opens in new window ]
Labour Party spokesman Ged Nash called for a full Dáil debate when the House reconvenes next Wednesday.
He said it was a “genuine windfall for the State”, calling for the proceeds to be redirected to housing, infrastructure and to fund climate-change measures.
Róisín Shortall, the Social Democrats spokeswoman on finance, welcomed the judgment and said it reflects “extremely badly on the Fine Gael-led Government which opted to appeal this decision back in 2016″.
Paul Murphy, the People Before Profit TD for Dublin South West, said it was a “good day for the Irish public and a very bad day for the Irish Government”, which “has fought tooth and nail for one of the richest corporations on Earth against the interests of the public”.
[ What is going on with the Apple tax case and what does it mean?Opens in new window ]
Aontú leader Peadar Tóibín said he has written to the chair of the Oireachtas Finance Committee John McGuiness requesting that the Minister for Finance Jack Chambers and the Minister for Public Expenditure Paschal Donohoe be brought before it. “Fianna Fáil, Fine Gael and the Greens fought the EU to prevent Irish citizens from legally receiving €13 billion in tax,” he said.
“This is an astounding fact and begs the question – who is the Irish Government working for? In whose interests is the Irish Government operating?” he asked.
The Department of Finance reiterated Ireland’s position, which is that it does not give preferential tax treatment to any companies or taxpayers. It said that the case involved an issue that “is now of historical relevance only” and that two tax opinions provided by Revenue to Apple in 1991 and 2007 that formed the crux of the case are no longer in force.
“Ireland has already introduced changes to the law regarding corporate residence rules and the attribution of profits to branches of non-resident companies operating in the State.”
The department added: “Ireland is an active participant in international tax discussions and has also made necessary changes to its taxation regime as international tax rules have developed over time.”
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