Sheer size of Apple tax bill complicates things for Government

The €13bn figure means the political noise will be turned up to the highest level

Cliff Taylor, Managing Editor of The Irish Times, and Pat Leahy, Deputy Political Editor, react to the news that Apple have been ordered by the EU to pay €13bn in unpaid taxes to the Irish state.

The scale of the Apple tax bill has suddenly complicated the politics of the matter for the Government.

Even though there is no prospect of the Government getting its hands on the money immediately – it will be placed into an escrow account pending the outcome of an appeals process likely to take years – the Government will certainly take a lot more flak for seeking to use all the legal and political tools at its disposal to avoid receiving the Apple windfall in the future.

“There would be no problem in appealing it if it was only a couple of hundred million euro,” one Minister said this morning. “But €13 billion? Jesus . . . .”

EU Irish Apple Tax Ruling: The Irish Times Cliff Taylor and Pat Leahy discuss the European Commission's decision

Posted by Irish Times Business on Tuesday, August 30, 2016

In recent days Government sources suggested at first that the number was likely to be in the hundreds of millions; yesterday that estimate had risen into the billions. Tuesday’s bombshell was a lot nearer to the “worst case” scenario for Apple, estimated by JP Morgan at €19 billion.


Bigger problem

That is worst case for Apple – but is this worst case for Ireland? Given its determination to avoid actually taking the money, it is certainly a much bigger problem for the Government.

Minister for Finance Michael Noonan has already issued an extremely strongly worded statement rejecting the commission's decision and outlining his intention to appeal it. A Cabinet meeting may be held Wednesday to formally decide on an appeal.

This assumes that the Independent Ministers, including the Independent Alliance, are happy to proceed with the appeal. Noonan met the Alliance Ministers on Monday to brief them on the issue and outline his plans to appeal, but nobody was aware of the quantum at that stage.

Noonan seemed to be indicating a few billion at that stage, according to sources briefed on the encounter. Not 13, though.

Unified Cabinet decision

The Independent Alliance Ministers were meeting Tuesday to consider the matter, it is understood. If they object to the Government’s appeal and prevent a unified Cabinet decision, then the Coalition is probably over, though there is no indication from any of them that they are preparing to do that.

What is clear is that they, like everyone else, realises how the context is changed by the vastness of the sum which Apple will now have to pay to Ireland.

The €13 billion figure will turn up the political noise several notches. Wait for Liveline, wait for the social media tsunami, wait for the infographics on what you could get for €13 billion.

Wait for the opposition assault on the notion of a Government trying desperately to avoid the biggest windfall in the history of the State.

As well as presenting Ireland with a large cheque, the commission has also presented the Government with a very tricky problem.

Pat Leahy

Pat Leahy

Pat Leahy is Political Editor of The Irish Times