Phil Hogan: Apple ruling not bid to force corporation tax change

The European Commission's judgment that Apple owes Ireland €13 billion in back taxes is not an attempt to force the State to change its corporation tax rate, Irish European Commissioner Phil Hogan has said.

Following the controversial ruling last week, Minister for Finance Michael Noonan accused Europe of trying to "establish a bridgehead" to get at Ireland and increase its 12.5 per cent corporation tax rate.

However, Mr Hogan dismissed suggestions the ruling by his competition commissioner colleague, Margrethe Vestage, was politically motivated. He said it had nothing to do with Ireland’s corporation tax rate but was focused on State aid.

"This decision has nothing to do with taxation, nothing to do with corporate tax rates, it has to do with state aid rules, and the interpretation of the European Commission is that the tax structures that were established by one particular company has implications for state aid rules," he said.

Mr Hogan said he did not believe Ireland’s decision to appeal the ruling would have any impact on the country’s ability to influence the arrangements that would emerge when the UK exits the European Union and the willingness of other EU states to listen to Ireland’s arguments for it to maintain a special relationship with the UK.

“No, it [Ireland’s decision to appeal] will have no impact on the Brexit talks- this is a separate decision, and the Commission respect completely the right of the Government and the company to appeal this decision - appeal mechanisms are there to do that and they are right to use them.

‘Quite expensive’

“They [Irish government] have made that decision [to appeal] and they have good reasons, from what I can see, to have made that decision. That is the process. It is going to be quite expensive and prolonged but the investigation was quite lengthy as well.”

Mr Hogan said he disagreed with comments from Apple chief executive Tim Cook, who said the ruling was "political crap". He rejected suggestions that the decision would have an impact on Ireland's ability to attract foreign direct investment.

“It won’t have any impact, from what I can see, on foreign direct investment because Ireland is well located to take advantage of the huge markets within the EU and people come here for very good reasons,” he said.

Speaking in Cork where he opened a European conference on rural development, Mr Hogan said he was aware a ruling was due last week but said he did not know the amount involved until it was published.

“I was aware of the ruling as part of the collective group of commissioners but I wasn’t aware of the figure. I discovered it at the same time as everyone else [but] no, I was not kept in the dark - I didn’t get the mushroom treatment,” he said.

Asked if he found himself in a difficult position, given Mr Noonan's comments saying the decision was politically motivated and a strong denial by European Commission President Jean Claude Juncker, Mr Hogan said his obligation was to fulfil his role as a European Commissioner for Agriculture.

“No, the way it works is where you are a member of an Irish government, you are a member of a cabinet, and when you make a decision, you go out and defend it, irrespective of what you might have said in the room - there’s collective cabinet responsibility,” he said.

“It’s the very same in the European Commission - what you say in a debate on an issue, once a decision is made, you are duty bound to that decision and when I became a Commissioner, I took an oath I would not be an Irish commissioner but would be a European commissioner.

“I have no difficulty at all - this is a decision what was proposed by the competition commissioner after a long three-year investigation and of course the appeal system is there for all states and companies to have it tested to see is it the right decision or the wrong decision.

“If you don’t accept cabinet responsibility, normally you have to resign in this country and it’s the same in Europe - if you don’t accept the oath you took in the European Court of justice, you should resign - but I am fully supportive of the 28-member commission in terms of the decision they made.”