Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

It is a terrible pity we do not have the final judgment from the European Commission and that we only got the Department of Finance's arguments late last night. However, I think we know enough to call it here between right and wrong and to make the call in terms of whether we should appeal or how we should appeal. The Minister for Finance, Deputy Michael Noonan, set out in his speech, as best I could understand it, the Government's argument, that it was necessary for us to appeal "to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state aid rules into the sovereign member state competence of taxation." On each of those grounds, I do not believe the right thing to do is to make the appeal.

Central to my argument is the need to defend the integrity of our tax system. We are not a haven for crooks. Our system is by and large straight. However, anyone outside this country looking in, and anyone making a fair assessment here, would have to admit we became a tax haven for corporations hiding offshore profits from tax. We are not a crook haven, but a tax haven. The sooner we admit that and acknowledge it, the sooner we can move on from it. We are starting to move on and we are starting to adjust our laws. However, by defending the indefensible, this Government is doing more than anyone else to confirm that international perspective. It is damaging our reputation. As a test of this, I was looking this morning at what the Fine Gael MEPs are saying in Brussels. Brian Hayes is fighting, but he would wake up in the morning and fight his own shadow, as we know. Mairead McGuinness has not said a word, as far as I can see from following her Twitter feed. She is talking about just about everything else, but not a word about this issue, because she knows that if she did it, it would seriously damage her reputation within the European Parliament. The same goes for Seán Kelly and Deirdre Clune. Why are they not speaking the truth this Government seems to believe in the European Parliament? They know that if they did, it would damage our reputation. No one in the European Parliament, as a representative body of the rest of our Union, thinks what is being said here today. They would be aghast at what was heard here today. It is just one test that shows why the argument that this is about standing up for our integrity does not make sense.

The second argument is about providing tax certainty to business. I do not believe that engaging in a legal quagmire for the next five years is going to provide certainty for anyone. If anything, the world is moving on from its acceptance of the tax system that applied not only here but in other countries. The business community is starting to wake up to the fact that it is no longer acceptable. As the Taoiseach and the Minister for Finance said, the system was broken. Why are we standing up for a broken system? That creates uncertainty in the business mind because actually what we need to do is just to be clear. To give two messages, as the Government did last week, saying it was going to lead the case for tax justice and at the same time coming out fighting for the old system, which was not just, is not good for developing business confidence in this country.

Finally, the Minister said we have to do this to challenge the encroachment of EU state aid rules into the sovereign member states' competence in taxation. That is not logical. The Minister for Public Expenditure and Reform, Deputy Paschal Donohoe, knows this. In all working life as a Minister one is dealing with state aid issues all the time. It is as common as anything in terms of how a Government works.

There have been 400 Irish state aid cases since 2000, so this is no new encroachment. There were 225 EU tax state aid cases in the same period across Europe. There is an argument that this is unique and terrible and an attitude of "How dare they take a state aid case when they are commonplace and how dare it be on the issue of tax when that is also commonplace?". However, similar matters have arisen in very recent times. One could argue that France and Germany are not getting hit as hard. That is a tough political argument to prove. The sophistry we have heard about sovereignty and what state aids are and are not is damaging to the reputation of this country and it should stop.

The Minister for Finance goes on to say - this is a common thing one hears - that there was no departure from Irish law, that no preference was shown in applying the law and that full tax was paid in accordance with the law. We have already admitted that the law was wrong. We rescinded it in 2014 when it became apparent what was happening so why are we defending a law that was not right? Everyone accepts that we have to protect and defend the independence of the Revenue Commissioners but this approach is coming from the political system. What we are hearing today is a continuation of the defence in respect of what went on. The political system is actually in the dock today and it does not even know it. The system is failing us. The image I have is one that can often be seen late at night whereby some mad fellow hears a remark and thinks someone insulted him. He takes off the jacket, pulls up the sleeves, and says, "Hold me back". What happens? Fianna Fáil says, "Oh, no, I will fight better." Labour is even bigger again. It says, "Hold on a second, the fighting Irish are coming out." The approach being taken is not clever. It is not winning the argument to my mind. The approach in question is certainly not winning the argument internationally but it may win it at home because it is striking all the right patriotic chords. In other words, we are putting it up to those Europeans. However, the approach is not clever.

Why this sophistry? What are we hiding from? Why are we confusing the picture? The reason I say that we know enough is because we have the original decision made by the European Commission and published in June 2014. That was over two years ago so there has been plenty of time to read it. The decision is quite detailed. In the first line, it gets to the heart of the matter and its decision. It says, "This decision concerns tax rulings which validate transfer pricing arrangements, also known as advanced pricing arrangements ("APAs")." At the core of this is not just a tax issue; it is the whole globalised model in which we and all our companies are involved and the question of how one actually applies transfer pricing. For example, how much of the €500 that the young Hans, Claude or Franz Josef from Germany pays for his mobile phone resides in Germany and how much in Ireland? How much resides in the Irish tax haven, in this Tír na nÓg land in the middle of the Atlantic - we should call it the Rockall scheme - which is actually where we put most of the profits? We were party to that. The Americans were also party to it. The American Government turned a blind eye and there are questions to ask about what they were doing, what they will do in response to the revelations and what Tim Cook said last week about where their real costs and profits lie. We were the other part of the equation and we should acknowledge that if we are to be honest, clear things up and move on.

I am not a judge. Perhaps the judges have to decide. One could read every line, but throughout its argument, the Commission has already set out - we can all read this - that it is fairly clear that the Irish Revenue accepted the calculation of profit attributable to Apple Operations Europe on the basis of actual costs without this choice being reasoned in any way. That is point 58 in the Commission's initial decision. We have a problem. I do not think we will win. This is another reason why we have been slow to take the case. More importantly, we need to answer questions here. If the questions cannot be answered in a 30 minute slot in this Chamber, we should call a special meeting of either the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach or the Committee on Budgetary Scrutiny because this matter needs to be debated in some detail and at length. The questions that have recently been asked need to be answered and not in two or three weeks' time. Why not have them answered in the next two weeks at one of our committees where this could be done without any great difficulty?

It is interesting that point 77 of the Department of Finance's statement of affairs indicates that the particular issue it is concerned about is the entirely unprecedented aspect of the state aid decision. The statement reads, "the concept that Ireland would not be judged to have granted illegal State aid if another jurisdiction had exercised taxing rights over the profits concerned is difficult to understand." In other words, it concerns the issue of where the transfer pricing really should take place. The Government and Ministers need to outline the position. Have they had any discussions with their European colleagues about whether they intend reviewing what their tax or transfer pricing arrangements will be in a way that we would not get that full €13 billion? That is where the real fight will be on this. There has been sophistry on the Opposition side today on the part of those who believe that the €13 billion is a guarantee. That is nonsense. Focus groups will say that will go down well but it may not be true. We have to get an answer to the question of whether the judgment of the Commission, which the Italian Government accepted, in which Apple Italy had to pay a €318 million fine last year was a sign of what we will see in other countries as a result of what happens in this jurisdiction and whether the allocation of €13 billion will change. We need to ask the American Administration what it is planning. To my mind, it is probably more likely that the taxes will end up accruing in the States. They have been giving out. They see this as Europeans trying to grab the money. Will they try to grab it back? If we lose, how much of the €13 billion would we get? We need to know what discussions and communications have occurred with the Irish Government. I cannot imagine that it has not talked to the US Administration in this regard. If it did not it was a dereliction of duty. We need to talk to them straight away now and find out what its view is in a civil way. We get on well with these countries. This is just cleaning up an old system that we all agree was wrong. That is not something that one wants to pull up one's sleeves over and start fighting people. We will just move on by cleaning it up and changing the system.

My main point-----

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