Michael Harty (Clare, Independent) | Oireachtas source

I thank the Chair for giving me an opportunity to contribute to this debate. The European Commission has concluded that Ireland granted undue tax benefits of up to €13 billion to Apple. The Commission's decision is that this is illegal under EU state aid rules because it allows Apple to pay substantially less tax than other businesses. Ireland must now recover this illegal aid. This is the headline statement of the Commission’s decision. We are not aware of many aspects of this ruling because the full documentation relating to this decision has not been made available for the consideration of the Dáil. We have to base our comments on the press release of the Competition Commissioner, Margrethe Vestager. This is entirely unsatisfactory for the purposes of this debate. It would lead one to believe that the decision is not black and white, but is mostly grey. We have been told that the information is commercially sensitive and that we may never see the full ruling because it will be heavily censored and redacted when it is eventually published. Therefore, we can only guess if it is correct to appeal this decision on a number of grounds.

Obviously, Apple will appeal this decision for vastly different reasons, primarily because it is about to lose €13 billion plus interest and penalties to a country that has been deemed to have used its perfectly legal tax system to give Apple preferential treatment. This is something the Commission deems to be illegal under competition law. This decision is based on an assessment of a breach of competition law rather than tax law. It is up to each country to have full control over its tax policy. This judgment does not challenge our independence to control our tax system. The judgment is saying that regardless of the tax system we operate, it must provide an even playing field for all and not confer preferential treatment on one company over another. How can preferential treatment be judged unless all companies are examined to determine if one has preference over another? Should each EU member state not be subject to the same scrutiny of how it treated Apple and other multinational global companies to determine whether preference was conferred? It would appear that for taxation purposes, Apple is not a multinational but a nationless global company. The Commission does not have the power to apply sanction or penalty, but it can demand that tax unpaid by Apple globally be recovered in full with interest and penalties going back over a ten-year period and be allocated to Ireland.

The Commission's decision is quite extraordinary. It directs Ireland to collect tax from Apple which was clearly not earned in Ireland, but was earned elsewhere across Europe, Asia and Africa, because Apple does not have taxable structures in those countries. This is an exquisite example of Alice in Wonderlandlogic. The Government is saying that this is not our money and we do not want it. The Commission is saying exactly the same thing. The amount of tax recovered by the Irish authorities would be reduced substantially, and probably to zero, if other countries were to recover tax earned on sales and profits generated in those countries. That is why I believe we are entering the world of Lewis Carroll. Interestingly, Alice in Wonderlandwas written by an English mathematician, Charles Lutwidge Dodgson, under the pseudonym of Lewis Carroll. In this book, the world of logic is turned upside down. Alice is inflated and deflated depending on what she eats or drinks. She meets many strange characters who speak in riddles and successfully confuse her. This delightful book of nonsense has been replicated in the Commission's decision. We could play the game of deciding which characters in Alice in Wonderlandcould be played by the main protagonists in the current controversy.

In addition the European Commission challenges logic. The European Commission is sanctioning Ireland by means of a reward, €13 billion plus interest and penalties - funds that are not ours by any stretch of the imagination. Sanctioning by means of reward is a unique concept worthy of Alice's Adventures in Wonderland. It is like pulling a rabbit from a hat. This is quantum taxation: like the electron in quantum mechanics, no one knows for sure where it is at any one point in time. Is it spinning up or down, left or right? Is it a wave or a particle? Look over there: it is in Ireland but when it reaches Ireland it is gone. We cannot catch it to extract tax. That is enough of analogy. There are serious and important points to be made. This ruling diminishes us all and we must learn important lessons from it. The Commission has discovered something inherently wrong but, in a perverse way, it has made the wrong judgment. It has uncovered the murky world of international taxation and Ireland is intimately involved. It has identified a serious tax avoidance process. Irish company structures facilitated Apple in reducing its tax liability in Ireland to 0.005% on much of its global earnings. It would be immoral for Ireland to claim this unpaid tax when we and the Commission know that this tax belongs elsewhere. Apple is not paying its fair share in tax and in not doing so is depriving citizens of resources which are badly needed to provide essential services, proper housing, medical care, education and infrastructure, if not in Ireland then definitely somewhere else. Apple is one of the biggest, most successful, cash-rich companies on the planet, yet it cannot bring itself to pay its fair share of tax. Apple, coming from the land of the free and the home of the brave, is not very patriotic. Whether this is legal is not the point. It is immoral and it is sharp practice. This has nothing to do with our sovereignty but everything to do with our integrity, self-respect and reputation.

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