Apple tax affair is not slam dunk the Government says it is
Cantillon: if State’s defence is watertight, why did the European Commission establish a formal investigation?
The Government’s position on Apple’s tax is that the rules were not broken; Ireland has nothing to hide; the State has an arguable defence; Apple got no special deal; and our tax system is transparent. Photograph: Julien Behal/PA Wire
It was to the chagrin of the troika of Cabinet members at yesterday’s announcement of the 400 new Paypal jobs – Enda Kenny, Brendan Howlin and Richard Bruton – that they were repeatedly asked about the investigation by the European Commission into Apple’s tax affairs in this country under state aid rules.
The Taoiseach and his two Ministers may not have wanted to be asked questions about the investigation, but they had their answers prepared. Each sang from the same hymn sheet – the rules were not broken; Ireland has nothing to hide; the State has an arguable defence; Apple got no special deal; our tax system is transparent; there is nothing to see here, now move on... Were it only so cut and dried.
A fundamental point that the Ministers’ mantra failed to address is that the commission clearly must already know what the State’s defence is, yet they have so far refused to accept it.
Last week’s move by the commission to open a formal inquiry into the issue was not a snap decision. It came following a year-long preliminary investigation, sparked when Apple told a US Senate committee it had received a special tax deal to set up in Ireland.
For almost 12 months, the commission has been seeking documents from the State, asking for explanations and establishing a prima facie case.
As part of that process, the Government clearly must have communicated its side of the story. If the State’s defence is so obvious and watertight, why did the Commission still go ahead and establish a formal investigation anyway?
One plausible explanation is that the commission doesn’t buy what the Government has been telling it.