Gerry Horkan (Fianna Fail) | Oireachtas source

I thank the Minister for his contribution and welcome him once again to the House. I welcome the opportunity to speak today on the European Commission’s decision that Ireland provided unlawful state aid to Apple. Fianna Fáil supports the decision to appeal the decision. Providing a competitive, consistent and certain tax policy is a key feature of Ireland’s attractiveness as a leading location for foreign direct investment. The European Commission’s unprecedented and deeply misleading €13 billion decision on the Apple case is a direct challenge to that. Approximately 700 US multinationals are located in Ireland, with some 187,000 people employed by foreign direct investment firms. All are potentially affected by the decision’s implications.

Government hesitation has only worsened the impact. The European Commission’s judgment marks a decisive overreach of EU power into national tax matters. Ireland must veto moves towards a common consolidated tax base and fight its corner to defend our national sovereignty and attractiveness for investment. Additionally, we must continue to work to lead the way in progressing international efforts to curb tax avoidance.

Fianna Fáil supports the decision to appeal the case for a number of reasons. First, Ireland has done nothing wrong and is entitled to set a competitive tax regime to attract foreign direct investment. The Revenue Commissioners fully applied Irish law as set out by the Oireachtas. The rights of member states to set their own tax policy has been consistently upheld and affirmed in EU treaties. There was no special treatment for Apple.

Second, the decision is essentially a power grab by the European Commission. It marks a move by the EU to unilaterally expand its power and use competition law on state aid to interfere with national tax matters. The astounding figure is designed to soften the ground before the controversial common consolidated corporate tax base, CCCTB, measure is relaunched later this year. This forms part of a broader agenda to set a common corporate tax rate across the EU and is being discussed at this weekend’s Economic and Financial Affairs Council meeting in Bratislava.

Third, retrospectively rewriting tax rules undermines tax certainty for all companies. A core feature of our attractive tax package is certainty, which allows companies to plan for the future. The European Commission’s decision effectively retrospectively rewrites our tax rules over a 25-year period and threatens that key pillar.

Fourth, Ireland is not the chief tax collector for companies based here. The European Commission position is inconsistent as it claims Ireland is owed the €13 billion but also that other countries are or could be due the money. Ireland is not the international tax collector for all those companies based here. Our legal responsibility is to implement Irish tax rules. We have already taken the lead in implementing changes to our tax laws to combat aggressive tax planning.

Despite negative internal and international criticism, Ireland has a strong, attractive corporate tax regime and has ensured we have led the way in addressing concerns on tax avoidance by big companies. Fianna Fáil strongly believes this should continue to be our priority while ensuring we uphold our ethical and international obligations. Ireland’s 12.5% corporate tax rate is one of the lowest in Europe and is an iconic feature of our overall tax package for businesses. In addition, our research and development tax credit is best in its class. The knowledge box 6.25% rate was the first globally to receive OECD approval.

The global backlash against multinational corporations avoiding tax through aggressive planning has already prompted a significant shift in Irish taxation policy. The Apple ruling refers to a historic taxation situation. We have led the way in developing new methods to ensure companies pay their fair share and are deeply engaged in the OECD base erosion and profit shifting process, BEPS. For example, the controversial “double Irish” was ended in 2014 to ensure shell companies could not avoid tax bills. Stateless issues were addressed to ensure Irish companies could not avoid tax. We have implemented country-by-country reporting and ensured the knowledge box was OECD approved, the first in the world to do so.

Ireland will continue to fully engage with the OECD process and EU initiatives, such as the action plan for fair and effective taxation. However, any EU measures effectively designed to standardise corporate tax rates must be fully resisted. This weekend’s discussion by Ministers of the Economic and Financial Affairs Council in Bratislava must be used to set down a firm marker that Ireland will not relinquish control of our domestic taxation policy. It must also be used to engage with potential allies in this policy discussion in the EU, in particular with countries such as the Netherlands and Luxembourg.

There are broader implications. The European Commission’s decision also exposes the serious geopolitical challenges Ireland faces in the immediate future. Our successful economic model has drawn on foreign direct investment and our membership with the EU, as well as deep trading links with our historic closest partner, the UK. Tensions between these parties are now increasingly evident. Brexit represents a serious diplomatic challenge and the prospect of the UK ramping up competition for foreign direct investment is very real. The EU has escalated efforts to introduce a common tax rate - for example, the CCCTB proposals are to be relaunched. Meanwhile, the EU has launched a series of actions against US multinationals that puts pressure on our role as a leading location for foreign direct investment. Any slide towards protectionism or a power grab by Europe would deal a serious blow to our geopolitical strategy.

The botched response of the Government to the European Commission’s findings exacerbated the impact of the decision. Instead of moving swiftly to reassure the foreign direct investment community of our continued commitment, it publicly hesitated and fretted over this illusionary €13 billion. The Government needs to send out a strong, clear and unambiguous message that it will vigorously contest the European Commission ruling. Our commitment to a fair 12.5% corporate tax regime must be re-affirmed as the cornerstone of our foreign direct investment policy. Our membership of the EU remains a core belief of Fianna Fáil but we must be willing to fight our own corner from within the European tent. Ireland must veto any moves towards the CCCTB and fight its corner to defend our national sovereignty and attractiveness for investment. Additionally, we must continue to work to lead the way in progressing international efforts to curb tax avoidance. I thank the Minister for attending and I look forward to his response.