European adviser’s opinion on Apple case will not impact State’s corporate tax regime, says Varadkar

Taoiseach Leo Varadkar said that the advocate general’s opinion on the Apple case will have no impact on Ireland’s corporate tax regime.

A key adviser to the European Court of Justice (ECJ) has recommended that the EU’s highest court set aside a 2020 ruling by a lower court that the European Commission had failed to prove that more than €13 billion of alleged back taxes was owed at all by the tech giant.

In his opinion, advocate general Giovanni Pitruzzella said the EU general court, the lower court, committed a series of errors of law and also failed to assess “certain methodological errors” relating to Apple’s Irish tax liabilities.

Mr Pitruzzella proposes that the ECJ refer the case back to the general for a new decision on the merits.

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European adviser’s opinion on Apple case will not impact State’s corporate tax regime, says Varadkar

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Speaking to reporters in Paris, where he is attending the International Conference on Humanitarian Assistance to Gaza, Mr Varadkar said he hadn’t yet had the chance to read the recommendation, but emphasised that the legal process had not been exhausted.

“It could be years before a final decision on the matter is made,” said Mr Varadkar. “It’s going to be in the courts for quite some time yet. But I really want to emphasise the position of the Irish Government, which is the one that we’ve held all along. We have a low corporation tax rate. We’ve had it for quite some time, but we’ve never had special deals with individual companies.”

[ Apple ruling: Why does it matter and what are the consequences for Ireland? ]

[ Apple tax case: iPhone maker and Irish Government suffer major setback in €13bn EU case ]

Asked if the uncertainty created by the lengthy legal process would have an impact, he said this was not a concern for the Government.

“This is an entirely historic case. It’s about taxes charged, or not charged, 10 or 20 years ago. Since then, our tax system has changed considerably. A lot of loopholes that were there are long gone. And we’re part of the international agreement now to bring the rate to a minimum of 15 per cent. So [this recommendation] has no impact on now or on the future. There are many more steps in this legal process. And I think it will be at least a year or two before we have a final decision.”

Earlier, Tánaiste Micheál Martin also dismissed concerns about the uncertainty the advocate general’s opinion on the Apple case could generate around Ireland’s corporate tax structure.

Speaking in Shanghai at the end of a four-day visit to China, he suggested that the ECJ could reject the advice.

“Ireland’s predictability and certainty has been there for well over 50 years, and that’s not affected by that particular opinion today. But of course, it’s not a court decision. We await the court’s deliberation of this.

“This has been a fairly long legal saga at the European level, I think from about 2016 onwards. So I think we have to await the outcome of the court’s decision,” he said.

Mr Martin said he understood that the court is likely to deliver its judgment within the next six months and he declined to say if the Government would appeal if the case returns to the lower court and Apple is found to owe more than €13 billion in back taxes.

“I think we’d take it one step at a time. The court has to make its decision first, so you have to find out what the court decision is before one can decide whether,” he said.

Speaking to students and staff at the China Europe Business School in Shanghai on Thursday, the Tánaiste said that the stability and certainty of Ireland’s tax policy was an important part of Ireland’s success in attracting foreign direct investment.

He said later that he was confident that the Apple case would not affect Ireland’s attractiveness to multinationals.

“Any interaction I’ve had with chief executive officers and board members of senior multinational companies who are located in Ireland, and I’ve met many of them over the last four or five years, they’ve been very pleased with the performance of their companies in Ireland,” he said.

“They’ve been very pleased with the environment, the pro-enterprise environment within Ireland and the manner in which Government interacts and works with companies and with reliability, particularly in terms of performance, in terms of the outcomes, in terms of productivity and in terms of delivery.”

It is not in the interest of the State or our economy to have “an unwelcome spotlight shone on our tax system”, Sinn Féin’s finance spokesman Pearse Dohery has told the Dáil.

Mr Doherty, the party’s deputy leader, said the opinion from the Advocate General of the EU’s highest court was “a blow” for Apple and the Government and “worse still, it is a further embarrassment for the State”.

Speaking during Leaders’ Questions in the Dáil on Thursday, Mr Doherty said the opinion further shines a spotlight on Ireland’s tax affairs and further strengthens the “resolve of some” within the European Commission to encroach on “something that was never a question in this case – that is our tax sovereignty and the right to set our own corporate tax rate fairly and consistently”.

Minister for Agriculture Charlie McConalogue, who was standing in for questions, said an opinion had been delivered and not a judgment.

“It’s not the judgment of the court itself,” he said. “We expect that in the near future, probably in a few months time ... As the matter is still the subject of legal proceedings, it’s not appropriate to comment on any element of the case.”

Mr McConalogue added that the Government takes the tax regime in place “very seriously” and have engaged at an international level in relation to the corporation tax. He said the Government would continue to engage appropriately with the judgment to “make sure we maintain a situation where there’s confidence in terms of investment in Ireland and the tax situation”.