Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

Tá muideanna i bhFianna Fáil i gcoinne chinneadh an Choimisiúin. Cinneadh dochredite atá ann agus is léir go bhfuil an Coimisiún ag iarraidh rialacha nua a chur i bhfeidhm maidir le cúrsaí cánacha. Fostóir tábhachtach is ea Apple sa tír seo agus suas le 6,000 duine ag obair san chomhlacht. Caithfimid dul i gcoinne chinneadh an Choimisiúin. Tá sé riachtanach don tír.

I welcome debate because it gives all Deputies an opportunity to outline their views on an issue which has deep economic and social importance. Owing to the manner in which the Commission chose to issue its ruling, and the initial shambolic response of the Government, much of the commentary is only now getting beyond empty sloganeering. We continually hear the incorrect claim that what we are talking about is the opportunity to grab a large pot of money for the Irish Exchequer. As we have already heard, there are Deputies determined to sell the idea that vast numbers of problems would be solved if only Ireland refused to appeal the judgment.

This is a complete distortion of a situation which in reality poses a potential threat to the long-term maintenance of employment and funding of public services. It is a clear and present threat to Irish workers in the private sector and the funding they generate for services on which we all rely.

One must take together this judgment, the statements of the European Commission and other leaders, the use of distorted and one-sided evidence and the proposals now being pushed on corporate taxation. When one does so there is no doubt that this judgment is a core part of trying to remove the opportunity for competition between member states in the taxation of companies.

A five-year investigation, including an unprecedented and targeted trawl of Revenue files, has produced an assertion but no evidence. It is regrettable that the full report has not been produced. The Commission should change its practices by ensuring redactions and so forth are in line before reports of this enormity are published. It has not been shown that there was selective treatment for one company. The refusal by the Commission to acknowledge how the company involved is one of our largest employers and taxpayers confirms that this was not a detached judgment.

Given the evidence available and the obvious attempt by the Commission and others to promote a damaging agenda on tax, the Fianna Fáil Party fully supports a robust and comprehensive appeal against this judgment. We also support a more active and assertive diplomatic and media effort to push back against the attempt to falsely accuse Ireland of unfair competition. It is in Ireland’s vital long-term interest to defend a corporate taxation system which has been a highly credible and effective route for creating and sustaining high levels of well-paid employment and funding vital public services.

Let us all be clear about one simple fact: there is not one extra cent available to the Government or the Thirty-second Dáil to spend in any budget which will come before us. Irrespective of our participation in an appeal, the legal battle will continue for up to six years. The problems we face as a country remain to be dealt with and there is no golden pot being withheld. In fact, the complete opposite may be the case. Any significant damage to Ireland as a reliable location for inward investment could lead to deep and permanent damage to employment and public services.

While it is clear that a majority of Irish people and of Members reject the attempts to demonise Apple and Ireland, unfortunately there are those here who are actively promoting a false story about multinational investment and tax. Most of these are Deputies who claim to represent the interests of workers but arrogantly dismiss the concerns of hundreds of thousands of workers in multinational firms, many of whom have been making these concerns known over the past week. The attempt to paint Ireland as a rogue nation on tax has been ongoing for decades. It has been in place since well before any of the measures attacked by the Commission existed and before many of our largest firms even existed.

It is wrong on every level to claim that Ireland is competing unfairly. This is a country which believes in helping business to grow, create jobs and innovate and we have done this on the basis of policies which are fair, legal and found elsewhere. The myths about how we in Ireland tax company profits keep growing and need to be nailed. The current uniform 12.5% rate replaced a more complex system which also levied different rates on different types of activity. While it is a low rate, it is by no means the lowest. What distinguishes it from other countries is that it is transparent and has had long-term political support. In contrast to countries where policy is constantly changing, Ireland has provided a long-term security on which to base major investment decisions.

According to the World Bank, which has studied corporate taxation for many years and applies a uniform methodology to all countries, the effective tax on company profits here is 12.4%, making Ireland one of a small number of countries where the statutory rate and the effective rate are nearly identical. In contrast, the effective rate in 60% of countries is far lower than the headline rate. In France, a 33% official rate is compared with a 7.4% actual rate. The difference between Ireland and France is that Ireland does not have a wide series of extra deductions and does not apply selective treatment in its application of the law.

It is extraordinary that the Commission has yet to investigate whether such major disparities distort competition between firms. The World Bank also rates Ireland as having high compliance with tax law, and as the sixth most efficient in the world in terms of bureaucracy.

Ireland is also distinct from other countries in that it does not add large amounts in extra taxes. The economic impact of our approach to corporate taxation, and that of other small and medium-sized countries, on the European Union as a whole is tiny. It is completely irrelevant to the causes and needed responses to the recent recession at European level. Unfortunately, these inconvenient facts have not stopped others trying to use our approach to corporate taxation as the reason they have failed to secure investment.

At different times I have had the privilege of working with our public servants in seeking major investment from multinational companies. It is sad that the Commission and some countries do not understand how often Ireland has won investment for Europe against Singapore, Puerto Rico, Switzerland, Israel and other countries that were our real competitors. We were not winning investments from other European countries. We were winning them from the countries to which I refer, although they consistently set out to undermine us by saying that Europe would eventually get us on corporation tax. They consistently tried to take investments from us in life sciences and technology companies. Europe has been too inward-looking and behind the curve in terms of the onset of globalisation and new technologies.

The argument that Ireland is providing a tax-free, libertarian haven for multinationals is simply nonsense. There is no doubt that abuses arose, in particular in respect of what were termed "stateless companies". However, they were far from unique to Ireland and they have been addressed. Moreover, is not now, nor has it ever been, Ireland's legal or ethical duty to attempt to unilaterally assume the role of the world's tax collector irrespective of the economic and social impact on the country.

In this debate and over the past week we have heard parties and Deputies claim that an industrial policy, which includes multinationals, has failed and is unsustainable. This model supports hundreds of thousands of jobs and pays for teachers, nurses and pensions in every part of our country. What is more, it has done so for decades. It has directly enabled significant falls in absolute poverty and rising living standards. It has not created a country without problems, but it has done more than any credible alternative industrial policy. One of the amendments before us refers to the failure of industrial policy and how we need to move to a socialist industrial policy. This is a continuation of the election platform put forward by the Right2Change group in February and signed by Sinn Féin and most of our hard-left and left-adjacent Deputies. It is worth taking time to look at exactly what the proposed alternative to current pro-enterprise policies actually involves. The policy, formally signed by every Sinn Féin Deputy and the others to whom I refer, calls for an increase in taxes on business of €8 billion per annum. That is no partisan attack – it is the cost they have published. They also demand full employment which, they say, will be based on direct public employment, non-profit corporations, co-operatives and labour-managed firms. All this, but not a single mention of job creation in the private sector other than to radically increase taxes on private employers. Demands for an end to our pro-enterprise policies and to seeking multinational investment advocate a stark reality, namely, that Ireland should try an industrial policy that has failed so often and so catastrophically that even communist-run countries have abandoned it.

Sinn Féin, of course, has two entirely contradictory policies. On one hand, it claims that it wants to take the money and leave everything else untouched but, on the other, it wants to demand higher taxes from employers and put all efforts into a radical left industrial policy. The softer policy is what we get when that party is busy raising money from American corporate executives at the Waldorf Astoria. Then, those involved are all sweetness and light and talk about how much they love America. On every point of substance, domestic and foreign, it is an increasingly ideological left-wing anti-enterprise and anti-private-sector-workers policy. As recently as June, Sinn Féin MEP Matt Carthy angrily denounced his own country in the European Parliament and demanded that Ireland be forced to increase revenues from multinationals.

Attacking corporate taxation in Ireland is the one and only area where provisional Sinn Féin has demanded greater action by Europe in the 40 years since that party was founded.

Apple did not come to Ireland because of the supposed sweetheart deal condemned as illegal by the Commission. It has been here for 36 years. It has gone from 60 employees in 1980 to 6,000 employees now. The specific tax rulings involved were made before any of the products which made it the largest company in the world were invented. The tax rulings were made before there was an iPhone, before the App Store was created and when Apple was making a fraction of the profits it makes today.

The available evidence suggests that the Commission is flat-out wrong in claiming that the company paid 0.005% in tax in 2014.

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