Charles Flanagan (Laois, Fine Gael) | Oireachtas source

I am pleased to speak on this important debate for two reasons. I consider it absolutely essential that the Irish Government appeals to the courts regarding this decision of the Commission and its analysis. Second, it is really important that we have the opportunity to set out clearly to the Irish people why we wish to appeal. As Minister for Foreign Affairs and Trade, I am particularly conscious of the need to protect our international reputation. Appealing to a court to determine the legal validity of the Commission conclusions is a necessary step to defend the integrity of our tax system and the tax system across the European Union. With my trade hat on, speaking as chairman of the Export Trade Council, I can say that it is also crucial that we provide tax certainty to business. I continue to be a passionate supporter of the European Union project. I believe part of its great strength is that it is clearly governed by the rule of law. In this instance the Commission is encroaching into an area of taxation which is a sovereign competence. I believe the European courts will support that view. Our taxation system is founded on the strict application of the law as enacted by the Oireachtas, without exception.

The Irish Revenue Commissioners, whose integrity is widely admired, collected the full amount of tax due from Apple in accordance with Irish law. Ireland did not give any favourable tax treatment to Apple. No State aid was provided. These are the simple facts at hand. I welcome the Commission's statement that its decision does not call into question Ireland's general tax system or its corporate tax rate. While this has been little reported upon, it is a most important statement.

No one can dispute that the international tax system is in need of improvement. I commend the Minister, Deputy Michael Noonan, for his leadership in this area during the course of his tenure as Minister for Finance. Ireland has been actively addressing aggressive tax planning both domestically and in multilateral fora. In 2014 and 2015, the Minister, Deputy Noonan, enacted changes to our corporate tax residence rules to combat stateless companies and to end the so-called double Irish tax structure. These reforms are little commented upon but they remain of fundamental importance.

Speaking as Minister for Foreign Affairs and Trade, I am acutely conscious that while there is some space for domestic action, the problem in the international tax system are most effectively addressed in multilateral fora. Ireland alone cannot solve these difficulties in global taxation practice. We continue to play an important and active role in global work to reform the international corporate tax system, most importantly through the OECD and BEPS agenda. Ireland has actively sought to implement BEPS through measures such as country-by-country reporting. The knowledge development box was the world's first such tax measure to comply with the OECD's tough new standards. At EU level, Ireland agreed with the anti-tax avoidance directive in June with other member states.

The international community needs to work together to tackle the problems in the international tax system. This is a time when the European Union should be seeking to work more closely with the United States of America rather than clashing with it.

The approach to state aid proposed by the Commission is a recipe for confusion and uncertainty. Taxpayers in EU member states are entitled to rely on the law of those states. Governments cannot prudently manage their finances where tax receipts can be subject to retrospective and unforeseeable changes on foot of a very broad application of state aid rules. The need for fairness and certainty are critical factors in the Government's appeal of the Commission's decision. The analysis presented by the Commission sits very uneasily with the overall Commission demand for responsible fiscal management by member states. Investors, as I am sure everyone in the House will agree, take decisions on the basis of predictability. Uncertainty militates against investment and job creation. In the context of Brexit and other economic headwinds, this is a time to underpin the resilience of the Irish economy in the coming years.

It would be totally wrong to see the Government's decision to appeal the Commission's findings as turning away from the European Union. On the contrary, we are turning to the European Union courts to support our view on the correct demarcation between taxation and state aid under the law. While we disagree with the decision of the Commission, it is important to underline that Ireland is a committed member of the European Union. Our appeal is in defence of the European Union acting in a fair, predictable and certain manner. This is not only in Ireland's best interests but also in the interests of the European Union and all of its member states. In doing so, we are taking the urgently required remedial action in defence and support of our economy, our reputation and the wider business community.

See this speech in context