Deadlock in Cabinet over response to €13bn Apple tax ruling

Fine Gael and Independent members of the Government failed to reach agreement last night on a response to the €13 billion Apple tax ruling before today's Cabinet meeting.

Last night's talks followed a public clash between Apple chief executive Tim Cook and EU competition commissioner Margrethe Vestager over the motivations for the EU investigation into Apple, and its finding that Apple's effective tax rate in the EU in 2014 was 0.005 per cent.

The five Independent Alliance TDs who support the Government, as well as Independent Minister Katherine Zappone were still involved in talks last night in an effort to find an agreed collective position with Fine Gael.

Taoiseach Enda Kenny and Fine Gael Ministers have argued strongly for an immediate decision to appeal against the ruling that Apple’s tax arrangement with the Irish authorities was illegal State aid.

They argue it is imperative to make immediate moves to safeguard the State’s reputation in the wake of a judgment that has damaged Ireland’s standing internationally.

Demands

However, Independent Ministers refused to back the appeal at Wednesday’s Cabinet meeting and instead set out a number of demands in return for support. Fine Gael is now understood to have acceded to most of the requests, including an early recall of the Dáil to debate the appeal; an assessment of the effective tax rate of multinational companies in

Ireland

; and strong commitments to tax justice.

While it is understood the Independent Alliance Ministers Shane Ross and Finian McGrath may now be willing to support the appeal, there was continuing uncertainty last night over Ms Zappone's position.

She held two separate meetings with Attorney General Máire Whelan yesterday, lasting three hours in total. She was also involved in intense consultation with independent experts on tax and economics. She wants clear commitments from Government on achieving meaningful tax justice, her spokesman said.

Yesterday, Mr Cook alleged the commission was motivated by political concerns and its ruling was based on “no fact or law”. He rejected the finding Apple had received illegal state aid and also denied it enjoyed the tax rate claimed by the commission.

Independence

Speaking in

Brussels

, Ms Vestager defended the independence of the commission’s competition division. “I know what we are obliged to do and that is to take decisions that are independent, based on the treaty, the facts of the case and can be checked by the European courts,” she said.

Asked about the finding of a 0.005 per cent tax in 2014, Ms Vestager said the commission had used figures supplied by Apple in US Senate hearings in 2013.

Fine Gael Ministers expressed confidence last night that the memorandum from Minister for Finance Michael Noonan for an appeal would receive full Cabinet backing today. "I think it is okay and we will get there. I will reserve my final judgement until Cabinet," said a source.

But Independent Minister of State John Halligan said the disclosures this week were shocking and offended people's sense of fairness. He also expressed his preference for a Dáil recall before any Cabinet decision. His Alliance colleagues have accepted, however, that the recall will occur after the Government decision has been made.

Fine Gael has been adamant that it will not compromise on an early decision to appeal.