Irish appeal of Apple ruling a ‘strange decision’, says Moscovici

EU economics commissioner warns of further measures in fight against tax avoidance

September 9th, 2016: The EU’s Economics Commissioner Pierre Moscovici labels the Irish government's move to appeal a ruling that Apple owe the State €13bn in unpaid tax a 'strange decision'. Video: European Commission

 

The Government’s move to appeal the European Commission’s ruling on Apple’s tax affairs in Ireland is a “strange decision”, according to the EU’s economics commissioner Pierre Moscovici.

The commission issued a ruling on August 30th which said Ireland must recover up to €13 billion from Apple after finding the US tech company had been granted selective tax treatment.

Mr Moscovici has warned that the commission will “go further” in its fight against tax avoidance, as European finance ministers gather in Bratislava for the first time since the commission’s ruling.

Speaking on his way into the meeting, at which new proposals for further harmonisation of tax rules across the European Union will be discussed, the French commissioner said he fully supported his colleague Margrethe Vestager in her finding against Ireland.

“We are not a politicised commission we are a political commission with a political will, and this political will is clearly to fight tax evasion, tax fraud and aggressive tax planning,” he said.

“We are going to go further, with proposals such as a relaunch of the CCCTB (common corporate tax base) and the establishment of a European black-list of tax havens.”

He described the Irish Government’s decision to appeal the commission’s finding as “strange”.

Economic programmes

“It is a strange decision, in a way, to say ‘I don’t want your €13 billion’ when you could have some social programmes or economic programmes in a country that has been damaged by a crisis, but that’s their own will.

“We will defend our point of view . . . We know that we are right. It’s not arbitrary.”

Arriving to the meeting, Minister for Finance Michael Noonan said he expected other countries to support Ireland’s appeal of the Apple ruling as it goes through the European court system, pointing out that Ireland has been legally represented at similar appeals relating to state aid cases against Luxembourg, Belgium and the Netherlands.

“Because it’s a judicial process we are not trying to drum up support . . . but there have been cases and rulings in the last 12 months or so in respect of Luxembourg, Belgium and Holland. They have all appealed and Ireland has associated itself with the appeals and are legally represented at the appeals. I would assume something similar will happen in this case,” he said.

Pointing out that Ireland had already phased out the idea of a stateless company and the so-called double Irish system, he said that, in terms of the present position Ireland is one of the “leading countries in terms of reform of tax”.

‘Adverse to Ireland’

“The issues under appeal are historic issues and I’m sure that a lot of countries will discuss these with me privately, but I don’t see them as a debating issue which will be adverse to Ireland.”

New plans for further cross-border harmonisation of tax rules across the EU are to be discussed by European finance ministers at the ecofin meeting.

A discussion document prepared by Slovakia, which currently holds the rotating presidency of the EU, and seen by the Irish Times, sets out a number of proposals on tax which will be considered by ministers during a discussion scheduled for Saturday morning.

This includes a proposal for “further cross-border harmonisation of tax rules”, binding tax rulings and advance pricing agreements and a proposal to train tax administration officials to help them deal with “new global challenges” in the field of taxation.

The document states that while recent changes in international tax rules through the OECD process were “much-needed” , “coherent implementation of such measures in form of hard law within the EU” eliminates uncertainty and possible double taxation resulting from different approaches adopted by different countries.

While Ireland is likely to oppose any measures that signal a transfer of tax competency to Brussels, other measures contained within the proposal will be welcomed by Dublin.

Also contained in the document is a consideration of “tax certainty” to ensure that companies are not deterred from investing in the EU.

Asked if the Apple judgment sent out the wrong message to companies that want to invest in Europe at a time when the EU is facing a serious challenge due to the British vote to leave the bloc, Mr Moscovici said: “We are an open economy. We need to have free trade. We need to have investment from abroad, but we also need to have common rules.

“The message must be heard – no more tax evasion, no more tax fraud, no more tax avoidance, no more aggressive tax planning.”