Catherine Connolly (Galway West, Independent)
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I remind Members that this session on the decision by the General Court of the European Union in the Apple case will last for one hour.

Paschal Donohoe (Dublin Central, Fine Gael)
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I congratulate the Leas-Cheann Comhairle on her election.

I welcome the opportunity to comment on the recent judgment of the General Court of the European Union. It was always important that the State challenged this decision and did not accept the Commission's reasoning, as some in this House and elsewhere wanted. The decision of the previous Government to appeal the Commission decision was based on our strong conviction that Ireland did not give favourable tax treatment to Apple and that no state aid was provided, with the full amount of tax paid by the Irish branches of the relevant Apple companies. Ireland does not do special deals with individual taxpayers and the court judgment supports our position on these points. In particular, I emphasise some observations relating to the case in response to the public narrative that has developed in the days since the announcement of the judgment.

As Deputies are aware, the General Court of the European Union concluded that the Commission, in its decision, had failed to demonstrate that by issuing the opinions in 1991 and 2007, the Irish authorities had granted the two Apple companies a selective advantage. The court rejected the lines of reasoning put forward by the Commission. It is important to give a little bit more background to what exactly the judgment states.

First, the court annulled the Commission's primary line of reasoning, which claimed that the profits derived from the Apple intellectual property licences should have been allocated to the Irish branches of Apple Sales International, ASI, and Apple Operations Europe, AOE, and the profits of that intellectual property taxed in Ireland. The Commission had tried at that point to rewrite Irish law by arguing the Revenue Commissioner should tax all of the worldwide profits of ASI and AOE in Ireland. There was no basis in Irish law for the approach asserted by the Commission. The decision misrepresented the activities of those two Irish branches. The branches carried out functions and there was no allocation that would have justified the Apple intellectual property licences in those branches.

Second, the court annulled the subsidiary line of reasoning arguing that even if the Commission were to accept that Apple intellectual property licences should not have been allocated to the two Irish branches, the profit allocation methods endorsed by the opinions had led to a result departing from a market-based outcome. No evidence was produced to support that claim and the Commission produced no evidence to demonstrate that the profit allocation methods endorsed by the Revenue Commissioners led to a reduction in ASI's or AOE's chargeable profits in Ireland.

Third, the court annulled the alternative line of reasoning whereby the Commission claimed that the tax opinions were the result of discretion exercised by the Revenue Commissioners. The Commission failed to show that the opinions conferred any selective advantage on ASI or AOE or that Revenue could exercise any discretion to provide such advantage.

These are the facts as set out by the European General Court. Any appeal will be based on a point of law and not on the facts of the case.

Over the past week, and ever since we decided to appeal the Commission decision, some have questioned Ireland's stance in this regard. However, the judgment of the court has fully endorsed both our decision to appeal and the underlying principles and transparency of our corporate tax regime. In particular, the judgment will reaffirm certainty in our taxation regime and that it can be relied upon as a fair and appropriate system. If the decision had gone unchallenged, businesses operating in Ireland, either domestic or foreign-owned, would have had no certainty that decisions being made and the prevailing Irish tax law at the time could not be contested a quarter of a century later. This would have constituted a serious and material business risk which, in my view, would have had a chilling effect on investment and employment decisions.

Ultimately, this case related to a mismatch in international tax law. Two branches were incorporated in Ireland but not resident in Ireland for tax purposes as they were managed and controlled in the United States. The significant value creation was in the US but the companies were not resident in the US for tax purposes as they were not incorporated in the US. There was thus a significant mismatch between the Irish and American tax systems but it is clear, and it has been said previously, that state aid law does not constitute an appropriate mechanism for addressing the gaps that exist in the international tax system. Indeed, this case involves an issue that is now of historical relevance only. The opinions date back to 1991 and 2007. They are no longer in force. Ireland has already introduced changes to the law to deal with the mismatch of Irish and US rules regarding company residence.

I would like to address next some of the issues circulating because of the decision and Ireland's tax system more generally. It is important to makes these points as they do not seem to be well understood or appreciated. This case did have a significant reputational impact on Ireland and on our corporate tax system. The annulment of the decision should redress some of the reputational outcomes of the decision.

It is unfortunate to hear the arguments that were debunked in this judgment still given credence over the past week. There has been inappropriate and unfair labelling of our tax system, including by some Members of this House, because of our low tax rate. These assertions are untrue and unhelpful. As this case involves an issue that is now of historical relevance, some commentary has failed to acknowledge the changes that have been made not only to our tax system but to the international tax system over the past decade.

Ireland is committed to having a corporate system that meets international standards. Ireland's Corporation Tax Roadmap, which I published last year, provides ample evidence of the significant actions we have taken to date, and will continue to take. I firmly believe that the changes agreed to date internationally will significantly limit the ability of multinationals to engage in aggressive tax planning. Further changes were made to the Irish corporation tax code in the Finance Act 2019.

We have been successful in attracting investment into Ireland and we fully tax companies on the profits attributable to activity that takes place in Ireland. Where companies have in the past been able to use mismatches in Irish and US law to book profits in zero tax countries, we have taken action unilaterally to amend our tax code. US tax reform should also limit the effectiveness of any future aggressive tax planning schemes that could be designed by multinational companies or organisations.

We are a leader in tax transparency and one of only 24 jurisdictions worldwide to be recognised as fully compliant with international best practice. The best way to ensure tax is paid in the right place is to ensure that all countries have the necessary information to risk-assess and to audit companies. Our openness and transparency are designed to ensure that we facilitate the exchange of all relevant information with other tax authorities.

The breadth of these changes can be seen when comparing Ireland's effective rate of corporation tax with our headline rate of 12.5%. At the end of June, Revenue published entity-level data on effective tax rates for 2018, showing internationally owned multinational enterprises in Ireland report an effective tax rate of 11.6%, with the top ten companies with a rate of 11.3%. This is further enforced by a recent OECD study and, for Ireland, the figures show an average effective tax rate of 12%.

We will now await to see if an appeal is made to the Court of Justice of the European Union. If there is an appeal, it could take a further two years before the case would be ultimately concluded. If there is an appeal, Ireland will defend its position. If there is no appeal, the judgment would constitute a final judgment.

In terms of our continued journey to ensure a fair and transparent tax system for all, I intend to publish an updated roadmap later this year reflecting on the actions we have taken and the steps that may be taken in the future.

Pearse Doherty (Donegal, Sinn Fein)
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Ar dtús báire, gabhaim comhghairdeas leis an Leas-Cheann Comhairle agus í i mbun a céad dualgais sa phost. Is lá iontach é dár dtír agus don Dáil seo ós rud é go bhfuil an chéad bhean, agus Gaeilgeoir líofa, tofa mar Leas-Cheann Comhairle na Dála seo.

On 15 July, the European General Court ruled that the competition commission did not succeed in showing that the requisite legal standard that Apple Sales Ireland, ASI, and Apple Operations Europe, AOE, had been granted illegal state aid through selective tax advantages. It is essential to understand what the ruling of the European General Court did say, what it did not say and what were, and still are, the undisputed facts of the case. The Commission's argument centred on two tax agreements between Revenue and two Irish incorporated Apple subsidiaries, Apple Sales International and Apple Operations Europe. The ruling of the European General Court did not dispute or impugn the fact that the two Revenue rulings, the first in 1991 and the second in 2007, allowed ASI and AOE to attribute their profits to a head office, a shell corporate structure that existed only on paper with no staff whatsoever.

These tax rulings allowed Apple's Irish subsidiary to record European profits of €16 billion in 2011 with only €50 million taxable in Ireland, which is an effective tax rate of 0.03%. These are facts that the European General Court has not disputed or challenged. This arrangement was disclosed by Apple's head of tax operations, Phillip Bullock, at the 2013 hearing of the US Senate Permanent Subcommittee on Investigations as it investigated the onshore operations of Apple. At that hearing, Mr. Bullock confirmed in sworn testimony that the income earned by ASI and AOE was subject to tax "in accordance with the agreement that we have with Ireland", which he confirmed was fixed at a maximum of 2%. Again, these are facts that the General Court did not dispute or challenge.

The fact that Apple's Irish subsidiary paid less than 0.05% in tax is not something this Government should claim as a victory. The Commission lost this case. That does not mean that Ireland has won. Let us start with the Commission. The Commission argued that because the corporate structure in question, which paid less than 0.05% in tax due to an arrangement with Revenue was only on paper with no staff, the profits attributed to it should not have been attributed to that entity. By implication, the Commission argued that the profits should therefore have been attributed to Apple's Irish branches, which were tax resident. The European General Court ruled that it was not enough to show that these profits should not have been attributed to the ghost entity. Instead, the Commission had to demonstrate that the profits should be attributed to the Irish branches, something the court ruled that the Commission failed to do.

The General Court of the European Union found that while the Commission successfully demonstrated that Revenue was often arbitrary and inconsistent in determining where profit should be attributed, this did not prove that these errors provided a selective advantage to Apple. These were the findings of the court. It did not rule that Apple did not receive illegal State aid. That is a ruling it could have made but did not. Instead, it found that the Commission failed to demonstrate that illegal state aid was granted. This distinction matters. The ruling of the court is not likely to be the end of this case. In reality, this is probably just half-time. If the Commission appeals the ruling to the Court of Justice, that court may overturn the findings of the General Court. There is precedent for all of this, especially in state aid cases concerning tax advantage. In 2016, the Court of Justice annulled the General Court's judgment regarding selective tax advantages enjoyed by Santander. In 2018, the Court of Justice overruled the General Court's judgment in a case concerning a Spanish tax lease system.

This State's tax dealings with Apple may be before the Court of Justice before long. At what cost? The judgment of the General Court did not dispute the fact that an Irish subsidiary of Apple paid an effective tax rate of less than 0.05% for more than a decade. This is not a victory for Ireland. Far from it. This has put the spotlight of the Commission upon our tax affairs and strengthened the resolve of some within the Commission to encroach upon what was never at stake in this case; the right to set our own corporate tax rate consistently and fairly.

The issue in this case was never a corporate tax rate of 12.5%, nor was it our tax sovereignty. The Government knew this but justified its appeal of the Commission's original findings by hiding behind this dishonest argument. However, as a result of this case, the appeal and the agreement between Revenue and Apple allowing the company to pay less than 0.05% in tax, our reputation is tarnished and our tax sovereignty is in doubt. That is not a victory for Ireland. Some on the Government benches have used the results of this ruling to attack Sinn Féin, instead of dealing with the facts and consequences of the agreements made between Apple and Revenue in 1991 and 2007.

I will conclude by putting on the record a robust statement on the Government's appeal of the tax ruling made in September 2016. While the Government's decision to appeal the ruling is not surprising, the Cabinet's explanation of that decision is clearly contradictory. On the one hand the Government is saying it will defend a situation in which the richest company in the world was paying 0.05% tax on profits. On the other hand it says that Ireland will take the lead in the fight for international tax justice. By appealing this decision we are standing by the old regime. The days of massive corporate tax avoidance are coming to an end. We could have started to restore our reputation by admitting that the tax loopholes Apple has availed of were inappropriate. Instead we will be stuck in a legal limbo for the next five years, defending the indefensible while at the same time saying we want to do things in a different way. Those are not my words. They are the words of the Green Party leader, the Minister's Government colleague, the Minister for Communications, Climate Action and Environment, Deputy Eamon Ryan.

This may not be the end of the issue. In the event of the Commission appealing the ruling of the General Court of the European Union to the Court of Justice, Ireland will once again be under the spotlight for all the wrong reasons. Whether or not the Commission appeals the ruling, it is clear that moves will now be made to encroach on what was never at stake in this case, our tax sovereignty. I discussed this with the Minister in the Dáil just last week. That sovereignty is worthy of defence. It cannot be denied that the Government's appeal has likely hastened the attack from our European counterparts.

Catherine Connolly (Galway West, Independent)
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Ní dóigh liom go bhfuil cainteoir ó Pháirtí an Lucht Oibre ann. Bogfaimid ar aghaidh go dtí an Teachta Shortall, Social Democrats.

Róisín Shortall (Dublin North West, Social Democrats)
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I congratulate the Leas-Cheann Comhairle on her election. It is a great result. There is no doubt that she has a very good track record in chairing the proceedings of the Dáil in a very fair manner. I have no doubt that she will continue like that and I wish her well personally and professionally.

There has been much talk about a victory for Ireland after the judgment of the General Court. However, it has to be accepted that this is a Pyrrhic victory for the taxpayers of Ireland and, indeed, the taxpayers of several other European countries. There are several reasons for this. It is the public purse that loses out from this result. We all have a right to expect a fair system of tax on corporate profits and to expect these taxes to be paid to Revenue. A basic issue of fairness and transparency arises here. If there was a fair system, the €13 billion in question in this case would have been paid into the public purse in Ireland and other countries.

The impact of the loss of that tax money is very significant, especially where our public services are concerned. We know that public services are crying out for adequate investment. We have developed a system and a reputation for treating multinational companies very well. That is fine, and we get a lot of high-quality jobs from foreign direct investment. However, there is a price to be paid for that. Our tax receipts are inadequate to funding proper public services. Our experience with Covid-19 in recent months has exposed the weaknesses of all of our public services and the crying need for investment to bring them up to modern European standards. Our public health service and our system of childcare lags a long way behind those of our European neighbours. That, in turn, puts a huge burden on people living in this State. It also reduces our competitiveness and adds to wage demands. There is a price to be paid domestically for our very generous corporation tax system. It is a very heavy price.

It is not just people who live in Ireland and struggle to deal with the high cost of living who say that, or the many working people who have to shell out for basic public services that citizens and other European countries assume as a matter of right. The business community increasingly says it cannot attract people to come back to Ireland to take up jobs because of the high cost of living. Businesses make particular reference to the high cost of housing, childcare and healthcare. These add to wage demands and reduce our competitiveness.

Moreover, the favourable treatment of multinationals shows a very significant lack of fairness when compared with our treatment of domestic small and medium-sized enterprises, SMEs. This unfair treatment is wrong. It makes it very hard for our domestic SMEs to compete. We now know that Apple paid a 0.005% tax rate on the profits in question. That amounts to a tax of 5 cent on every €1,000 of profit. It is a real slap in the face for Irish taxpayers and SMEs. Even if the General Court has found that it was legal not to tax profits at a fair rate, it is clearly morally wrong that a global multinational can strategically manage its tax affairs so as to pay so little and was facilitated in doing so by our Government.

The Irish economy should aim to compete for foreign direct investment at the higher end of the value chain, where investment can be predicated less on our tax system than on the agility and innovation of our workforce.

The issue at the heart of this case and many corporate tax questions is tax justice and transparency, as well as solidarity with our EU partners. If the public is to trust in politics and government, transparency and integrity must be the defining features of all decision-making. Transparency is especially important when it comes to Ireland's corporate tax rate, which, as a result of this tax case, has become the subject of heightened scrutiny throughout the world. The judgment may very well be appealed by the European Commission to the European Court of Justice, bringing further scrutiny of Ireland's historical tax treatment of Apple and continuing to cast an unfavourable light on Ireland's reputation regarding tax matters. The judgment makes clear that it is up to Ireland's politicians to put in place a corporate tax system that is fair and just. Our corporate tax system continues to attract scrutiny and criticism from our European partners. Reform should be pursued to ensure fair taxation and to rebuild our international reputation.

Gerald Nash (Louth, Labour)
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I apologise to the Minister and colleagues for my delay in getting to the Chamber. The Labour Party is a pro-FDI party. We support the companies that are here provided that they comply with our laws, each and every one of them pays a minimum effective corporation tax rate of 12.5% and they treat their workers with dignity and respect and provide them with a decent wage. Many of those companies do all of that. It was the Labour Party, under the leadership of William Norton, which transitioned Ireland away from its isolationist and protectionist policy and towards an opening up to the world and the attraction of multinational corporations and foreign direct investment. The historical narrative generally is that this development was an exercise commissioned by Seán Lemass and T.K. Whitaker. In fact, that exercise was commenced by William Norton when he was Minister for Industry and Commerce.

We have always recognised that a generous and competitive rate of corporation tax does not a national industrial strategy make. We also know that a generous corporation tax rate was not the only reason that firms chose to locate to this country or have their European headquarters here. Ireland's educated workforce has long been one of our greatest assets. Following Brexit, Ireland, together with Malta, will be one of only two English-speaking countries in the European Union, and that positions us well for future investment. As the Minister knows, Irish workers are officially the most productive in the world, according to the Organisation for Economic Co-operation and Development, OECD, adding an average of nearly €87 to the value of the economy every hour that they work. No company in its right mind would relocate from such a country, which has fluency in English, a highly educated, productive and skilled workforce and access to one of the largest markets in the world. I say that in the context of some of the challenges we will face over the next few years in terms of international moves concerning the taxation of corporations and profits.

In our view, a minimum effective rate of corporation tax should be just that - a minium effective rate - and it should apply to each and every firm. It is a simple and straightforward position. There is a fairness argument here, as Deputy Shortall noted. We know that SMEs make up 99% of businesses in Ireland and account for more than 70% of employment. SME owners sometimes look askance at some of the aggressive tax planning that we know is carried on by multinational corporations. In the view of those SME owners and many others, that activity deprives the Irish economy of a sufficient tax base to resource the kinds of public services and supports our citizens need. We have a considerable focus at this time on the issues of corporation tax, fairness, tax justice and so on. We need to keep a focus on the evolving question internationally and respond to it in a fair, just and agile way.

I draw the Minister's attention to the skills gaps that are emerging. Dealing with those gaps will be exceptionally important in terms of our ability not just to attract but to retain and maintain investment in this country. We have one of the lowest levels of in-work training in the OECD, at 5.5%, compared with the levels in analogous states. Denmark, for example, invests really heavily in continuous lifelong learning and in-work training. Some 33% of all workers in Denmark receive some form of meaningful ongoing training, which will stand to the country in terms of its economic development. We need to look at that model and apply it here. In addition, it is a cause for concern that we have one of the lowest levels of digital skills in the European Union, which is kind of ironic given that we have so many enormously significant technology firms located here. One might wonder what the practical benefits are for citizens in having those firms here if we have such an enormous digital skills divide.

Finally, I draw the Minister's attention to the report last week by the Irish Fiscal Advisory Council, IFAC, which was really interesting and has some important messages for us. It notes that an international clampdown on aggressive tax planning, whether by the OECD's base erosion and profit shifting, BEPS, process or by the EU via Article 116 of the Treaty on the Functioning of the European Union, will likely blow a €2 billion to €3.5 billion hole in our tax receipts. This is revenue that IFAC has previously warned was "unsustainable" but which the previous Government had, in many ways, been using to cover massive cost overrruns such as that associated with the national children's hospital. Given the changes to our tax base, I do not think we will have that luxury any longer. Change is coming and we need, as a country, to lead that change and not bury our heads in the sand. That means co-operating with international reforms but also making sure that the kind of case we have been dealing with over the past couple of years never arises again. Notwithstanding that the State says the case was won, there is no doubt that there is reputational damage to Ireland arising from it.

We in the Labour Party have called repeatedly for the establishment of a standing commission on taxation, which would enable us to respond in real time to some of the aggressive tax planning that goes on. We need to be able to pay for the kinds of public services that we aspire to have in this country with a tax system that is objectively fair to everybody, including businesses both big and small. The people of this country are entitled to expect that the public asset gap can be closed over the next few years and that their hard work will be rewarded with the provision of free and accessible health services, decent social and affordable housing, publicly funded childcare and so on. That will only become a reality when we get our act together on corporation tax and make sure all corporations, regardless of their size and scale, contribute fairly in the context of a minimum effective corporation tax rate of 12.5%.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Masks like the one I am wearing are sometimes associated with stick-up robberies. It is kind of appropriate that it is politicians who are now wearing the masks that are associated with such robberies. It might be even more appropriate for the chief executive officers of some of the largest and wealthiest corporations to be wearing them, given the scale of their theft of tax revenues that should accrue to society in general from the absolutely staggering profits those corporations make. Those profits, which they make from the people working for them and on which they pay negligible levels of tax, are obscene. If the Minister does not start from that point, he is just being plain dishonest. The court did not dispute in its ruling that Apple paid 0.005% tax on vast amounts of profits.

That is obscene. There are no two ways about it. It succeeded in paying that derisory level of tax on vast profits by working through companies incorporated in this jurisdiction. The fact that the General Court of the European Union concluded that the Commission could not prove that the Revenue authorities conferred selective advantage on Apple does not take from the fact that Apple achieved that aim of paying a derisory level of tax in Ireland. Does anybody seriously believe that Revenue and the Government did not know that was happening? Does anybody believe that for one second? Unless we accept that Revenue and the Governments of the day were complete idiots, and I do not think anybody believes they were, then they knew what was going on and the derisory levels of tax that were being paid. However, the Commission could not prove that it was an arrangement designed specifically for Apple, although that is what it believes.

I have always believed that it was not just Apple that benefitted from such arrangements, but also a select group of ICT companies and possibly some pharmaceutical companies. They are certainly not arrangements from which that the vast majority of domestic small or medium enterprise in this country benefitted. In that sense, a very select advantage is conferred on these enormously wealthy companies.

Of course, the trick in all this is centred around intellectual property. This is not a historic issue. I love the concept of intellectual property. Firms were and are allowed to allocate profits to a company that is tax resident nowhere but is the holder of the intellectual property or the idea. They can allocate any amount of profit they wish to the company that owns the intellectual property. That is what they do. Every year, a company can declare profits of €1 billion, but give €990 million in royalties to the company which is the owner of the intellectual property and which is tax resident nowhere, thereby writing down taxable profit to negligible levels. They effectively write their own tax bill and the State allows them to do it.

These practices are an insult to the workers of the companies. The Government often declares that it must defend the jobs of the workers in Cork. That should absolutely be done. However, the idea that all of the wealth is generated by a company that is tax resident nowhere but holds "the idea" is insulting to the workers who produce iPhones and, indeed, those who sell them in Europe and the rest of the world. Apparently, their labour activity is worth nothing and the profits all result from "the idea". The ideas and the CEOs are not what kept us going and kept everything moving during the pandemic. Rather, it was the workers who do the physical work, the essential workers and the front-line workers. The ideological notion that one can attribute all the value to "the idea" or the intellectual property is a very capitalist and neo-liberal one which we should reject. That is an aside.

The crucial point is that none of this is historical. After the events which gave rise to the case, corporate profits went from €83 billion in to €190 billion in 2018. That is a 228% increase in gross trading corporate profits. In 2018, there were €190 billion in profits. That is a massive increase. How much tax was paid on those profits? A total of €10.4 billion. That is not 12.5%. No matter how many times the Minister asserts that these companies are paying 11.6%, as he just did in his address, they are not doing so. If they were paying 12.5% or even 11.6%, they would be paying approximately €23 billion in tax. How are they getting away with it? They are writing down their taxable profit on the basis of royalties paid to the company that possesses the idea or the intellectual property. In that way, they siphon off the profits such that the taxable profits are derisory and the effective tax rate is reduced to a negligible level. These practices are still going on. After pressure domestically and internationally forced the Government to do away with the double Irish, which was the mechanism through which Apple avoided taxes in the period covered by the ruling, the Government opened new doors for these companies. It is still going on. It is shameful and it is robbing people not just in this country but across the world of revenues that are needed for health, education, housing and infrastructure.

Mattie McGrath (Tipperary, Independent)
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Ar an gcéad dul síos, ba mhaith liom comhgairdeas a dhéanamh leat, a Leas-Cheann Comhairle. I am delighted that she has been elected to her position. I will miss her contributions from the floor. I always valued them and tried to listen to them. I found them to be engaging, interesting, educated and very fair and balanced. I know she will have the very same qualities in her role as Leas-Cheann Comhairle. We have been waiting for 101 years for a woman to be appointed as Leas-Cheann Comhairle and it is fabulous that it has finally happened. Obviously, she campaigned for the role, but I know, given the kind of humble person she is, that she would have been gracious in defeat had the result gone the other way. Go n-éirí go geal leat, a Leas-Cheann Comhairle.

I am glad the judgment has been released. I have mixed views on the issue. I represent the constituency of Tipperary, where there are more than 5,000 direct investment jobs in Clonmel alone. There are other such jobs in Cashel, Nenagh and many other parts of the constituency, including Dungarvan. Half of my parish is in County Waterford. There is a significant cohort of foreign direct development in the area.

It is fine for Deputy Boyd Barrett and many others on the left to just criticise, attack and knock. He referred to the workers. I value workers as much as anybody else does. My company employs between 18 and 25 workers. It is a two-way thing. If we did not have the innovators who come up with ideas, we would not have the jobs. It is a chicken and egg situation. One cannot have it both ways. We value those innovators. In addition, there are tax breaks available in respect of research and development.

I am a big supporter of the 12.5% corporation tax rate. It is upfront and out there for everyone to see. I understand that some other EU countries such as France might have a higher corporation tax rate, but they have a more creative or devious way of getting around it. I only have anecdotal evidence of that, rather than scientific evidence. Anybody who is in business knows there are tax schemes of which one can avail. Goodness knows, several such schemes were included in the July stimulus package announced last night. The schemes take time to bed in. It takes time for the employers and companies who need them to get used to them. The companies need a very good accountant who gives good advice. They need the best advice but often do not get it. I have experienced that myself.

The €13 billion pot of gold was meant to be at the end of a rainbow. Rainbows are common at this time of year or in May or at certain other times but, unfortunately, this particular rainbow was not there. We must accept the decision.

Merck Sharp & Dohme came to Clonmel in 1974 or 1975. It is a fabulous employer. It probably employs 600 or 700 people in its factory, never mind all the spin-off service industries. The situation is similar with regard to Apple. I heard Deputy Barry speaking on the matter last week. He related how he could see the factory up the hill from where he lives in Cork and in various other parts of the city. However, many people do not realise how many small businesses are able to take on employees as a result of sub-contracting for the large companies. The spin-offs are enormous. I refer to the raw materials and other products that are used by the factories. One must consider the businesses that maintain the factories or supply them with food and beverages and everything else that goes into them. Of course, the businesses pay significant sums in rates to the county councils, which forms a large part of the councils' funding.

The problem in recent years is that we cannot get businesses creating foreign direct investment jobs to locate them outside Dublin. Dublin cannot cope. It is wonderful to be on the top floor of the Convention Centre and be able to look across the city and see all the cranes and the massive development in this area.

It is fabulous. I do not envy it one bit but we want our fair share in other counties.

I do not know if this judgment is going to be appealed further. I am not right up to speed with it. It is certainly out there and maybe it will give us clarity. Foreign direct investment companies have people working here, watching and seeing what is going on. They can read as well. The negativity and the attacks on them day in, day out by some politicians of the left are not good because it is an ideological issue. We have had a general election without a very clear outcome. Nonetheless if the people were so aghast at this, one would think they would vote for parties of the left more and change the ideology. I come as a small businessman myself. I pay the taxes, nor do I have any corporation tax or special deals. I understand it is onerous and difficult. The PRSI has to be paid, and that is only right because workers must be protected. When we see the likes of Debenhams and many other big companies, when we see the meat industry, Meat Industry Ireland and how they have creative ways, we should tackle those because they are home grown and they are better even than the other companies at getting around the loopholes, investing in paper companies and companies that are just there as technical ways of devising it.

If I say one thing to the Minister, I think we need some of those business people in the Department of Finance to give him advice and to understand the thought process that goes into those big companies and the expert advice that they get. Have we a match for them in our Department? I am not criticising the people in the Department. I am just saying that we need that broad base of expertise. The companies need it too and they probably get people in who understand the tax laws and may have worked in that area as well. We need that as a resource.

As far as this judgment is concerned, I am glad it is out there. I just hope the can will not keep being rattled and we will not be upsetting and annoying every FDI company that we have here, their employees and their families and indeed the boardrooms in America. We are in a very volatile time and the boardrooms are conscious of what is going on. We have to compete with economies in eastern Europe and other areas where there is literally slave labour going on. We cannot condone that. It is abhorrent. We must have a balance and we must try to get as much tax from these FDI people as we can, but we have to be careful to ensure we do not banish them altogether - to hell or to Connacht - because if they left our country we would be a much poorer place. We would be much poorer in Tipperary without Merck, Boston Scientific, Abbot Vascular and many others. Clonmel Healthcare is home grown, but those pharma companies especially are tremendous. They are also innovators and are leading in the field of innovation and lifesaving devices. We must support them as well as criticising them. It cannot be a one-way street. We value the workers, we all support them, and all we want is fair play.

Marian Harkin (Sligo-Leitrim, Independent)
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I congratulate the Leas-Cheann Comhairle on her new role. She described herself yesterday as a bean láidir. I would like to add that she is a bean láidir ón iarthar. Déanaim comhghairdeas léi. I also congratulate the Minister, Deputy Donohoe, on his appointment as chair of the Eurogroup. It is certainly a very prestigious appointment for him personally and for Ireland. I suspect the issue we are discussing here may be raised at some point in those meetings.

As far as I am concerned, there are two aspects to this situation. It is complex. First there is the judgment in itself, but second there is the wider implication of tax justice at a national and global level. While those two issues are connected, they are not the same in this instance. The judgment itself is quite definitive in that it says the European Commission did not succeed in showing that Irish tax authorities had granted Apple Sales International, ASI, and Apple Operations Europe, AOE, a selective advantage. It also delivered a stinging blow in that the European Commission must pay all costs.

Apple and Ireland defended the case on nine grounds and some of them were successful. The Commission failed to show that state aid rules were breached. They also wrongly attributed the €13 billion to the ASI and AOE branches so the story of this pot of gold, as my colleague, Deputy Mattie McGrath, referred to, was just that. Even if the Commission had found otherwise, that money would not have come here. A portion of it might have but it was not ours as such.

The Commission was also wrong when it came to Irish tax law. It is worth noting that the European Commission in its statements at the time of bringing its case was highly political. Margrethe Vestager spoke of illegal tax benefits to Apple of up to €13 billion. That is a very strong statement and a very political one, especially from a high-profile Commissioner like Vestager, who has such a global reach. It was a serious blow. The stakes were high. In this, the Commission got it wrong. It is not wrong to say that Apple avoided paying tax by using various tax mechanisms in Ireland. It did, as we know. We are now afraid of the double Irish, for example, and for good reason. That kind of system facilitated multinationals to avoid paying corporation tax. However, the Commission was wrong to say that competition law and state aid rules could be used to prevent this from happening. The Commission was right in saying that Apple paid an effective tax rate of 1% on its European profits in 2003, but it was wrong in saying that these profits could be attributed to the two Irish subsidiaries. Ireland did not act illegally in this instance. The Minister stated that there is a mismatch in international tax law and that state aid law does not create an appropriate mechanism to tackle this issue. That is true. However, it is also true that our tax laws allowed Apple to evade paying tax. The premise always was that Apple at some point would eventually repatriate its profits to the US and pay tax there. The truth is that no taxpayer in this country could behave in that way, saying we will pay tax on the never-never in the future, whenever we get around to it.

Ireland is a small country, of course, and we have to look to our competitive advantages. Like many other small European countries, including the Netherlands and Switzerland, we have used loopholes in international tax law to facilitate large multinationals to evade paying their taxes, at least for now, on the never-never. The Revenue in Ireland has seen to it that the corporate tax receipts in Ireland are substantial, and indeed by European standards our per capitatake on corporate tax is one of the highest. That is our dilemma. We have a system that delivers significant corporate tax revenues to Ireland, no matter what people say. However, our tax laws still allow multinationals to evade paying tax. The double Irish comes to an end at the end of 2020, and in truth it should have come to an end sooner. Our new tax arrangements allow multinationals to receive capital allowances for expenditure on intangible assets such as intellectual property. Given that most of the large multinationals are now digital companies, this mechanism may be used to evade paying their fair share of tax. That is why the EU is pursuing a digital tax. We have worked with the OECD but the US is pulling out, so that is not working.

Initially I said that this is a political issue because tax justice is a political issue. I believe Ireland will have to be more proactive in ensuring large multinationals pay their fair share of tax. We cannot be responsible for fixing the international tax system but we must work with our European partners and let Europe take the lead on tax justice. We need to reassess. We need to protect our revenues but we also need to find ways with our European partners to tax multinationals. The common consolidated corporate tax base, CCCTB, would not work for us because of the formula used to decide where the tax was paid. There would be more tax paid but we would get less of it.

The country-specific recommendations from the Commission for the past two years tell us that we have to deal with aggressive tax planning. As I said, this is complex. We have to protect our revenues and at the same time promote tax justice. Perhaps, in that context, the suggestion from the Labour Party that a standing commission on taxation could play a significant role in teasing out these issues and arriving at an equitable system is something that we should consider.

Catherine Connolly (Galway West, Independent)
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Sin críoch anois le ráitis maidir leis an mbreith ó Chúirt Ghinearálta an Aontas Eorpaigh i gcás Apple.