Ireland’s cabinet on Friday agreed to appeal the EU’s decision ordering Apple to pay $14.5 billion in taxes to Dublin, saying it was an attack on the country’s corporate tax regime.
The European Commission ruled earlier this week that Ireland granted Apple tax benefits that amounted to “state aid” and enabled it to pay substantially less tax than other businesses between 2003 and 2014. It ordered Ireland to recover unpaid taxes from Apple of up to 13 billion euros, plus interest.
Apple has already said it will appeal to the EU’s General Court and Ireland is following suit after three days of talks between ministers from the right-of-center Fine Gael party, which leads the government, and ministers from the Independent Alliance, a much smaller grouping.
A draft motion that will go before Ireland’s parliament next week said the government should appeal the Apple ruling to defend the integrity of Ireland’s tax system, provide tax certainty to businesses and challenge EU encroachment on member states’ sovereignty.
“This ruling has seismic and entirely negative consequences for job creation in the future,” Public Expenditure Minister Paschal Donohoe said.
“Ireland does not do deals with taxpayers,” Finance Minister Michael Noonan said. Asked if he thought the decision was an attack on Ireland’s corporation tax rate, he replied: “I do.”
The $14.5 billion tax penalty is equivalent to what Ireland spent last year on funding its struggling health service and some left-of-center political parties have urged the government to accept the judgment and spend the money on a variety of projects.
But as The Wall Street Journal reports, “the government’s position is that a failure to challenge the judgment would threaten future investment in Ireland by U.S. companies looking to sell in Europe and other parts of the world, a central pillar of the country’s decades-old growth strategy.”
“Successive Irish governments have defended its relatively low 12.5% corporate tax rate despite often fierce criticism from other European governments,” the WSJ added.
Apple chief executive Tim Cook said he was “very confident” the EU’s ruling would be overturned on appeal.