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Ireland Joins Apple in Fight, Rejects €13 Bn Tax Payment, but Why?

Ireland has said no to tax payment which is equivalent to its last year’s funding on health service.

Published
Tech News
2 min read
Dublin has vowed to fight any adverse ruling against its age old corporate tax law. (Photo: iStockphoto)

Ireland’s cabinet agreed on Friday to join Apple in appealing against a multi-billion-euro back tax demand that the European Commission has slapped on the iPhone maker, despite misgivings among independents who back the fragile coalition.

The Commission’s ruling this week that the US tech giant must pay up to 13 billion euros ($14.5 billion) to Dublin has angered Washington, which accuses the EU of trying to grab tax revenue that should go to the US government.

With transatlantic tensions rising, the White House said President Barack Obama would raise the issue of tax avoidance by some multinational corporations at a summit of the G20 leading economies in China this weekend.

Paradoxically, Ireland is determined not to receive the tax windfall, which would be equivalent to what it spent last year on funding its struggling health service.

Ireland Protects Decades Old Low Corporate Tax Policy

Finance Minister Michael Noonan has insisted Dublin would fight any adverse ruling ever since the European Union began investigating Apple’s Irish tax affairs in 2014, arguing that it had to protect a tax regime that has attracted large numbers of multinational employers.

On Wednesday, he failed to persuade a group of independent lawmakers, whose support is vital for the minority government, to agree to fight the ruling by European Competition Commissioner Margrethe Vestager that Apple’s low tax arrangements in Ireland constitute illegal state aid.

However, he won them over at a second attempt when the cabinet met on Friday.

Apple, keen to defend its own interests, has already said it will lodge an appeal. For Fine Gael, the main Irish coalition party, a broader principle is at stake.

(This article has been edited for length.)

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