Apple tax verdict, a windfall or a headache?

A massive, massive headache landed on the government’s in-tray this morning from the European Comission.

A massive, massive windfall landed into the Government’s coffers this morning from the European Commission. Take your pick. Which way do you read the decision of the European Commission that concluded that Ireland granted undue tax benefits of up to €13bn to Apple.

The Commission said ‘selective treatment’ allowed Apple to pay tax rate of 1% on European Union profits in 2003 down to 0.005% in 2014.

In a statement, the EC said the benefit is ‘illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. Ireland must now recover the illegal aid.’

Both the Government and the company have strenuously denied any wrongdoing.

The Revenue Commissioners is to collect the additional tax deemed to be owed by Apple and the money will be managed by the National Treasury Management Agency.

It is a devastating finding regardless of your point of view and will have far reaching political and economic consequences in the months ahead.

Both Apple and the Government are to appeal the findings.

As a nation we are still running a current budget deficit and we certainly could do with a €13bn injection of funding for our housing plan, for our third level education system which has been starved of investment in recent years, our healthcare system could swallow up the entire €13bn windfall for additional beds in our hospitals and additional services and staff.

The trade unions are looking to end the two-tier pay structure introduced for teachers, gardai and other public servants.

The government promised to abolish the USC which takes in €4bn per annum and yet they have been clawing back on that promise in recent weeks in a bid to dampen expectations ahead of the upcoming budget.

So it is not as if we can turn our nose up at €13bn from Apple or anywhere else.

The government however will fight the corner for Apple in a rearguard action to protect the 5,000 Apple jobs in Cork and the thousands and thousands of other jobs from other multinationals which they will claim could be threatened by the upholding of the European Commission’s decision.

In all of this we must not forget the ordinary citizen of this state who is highly taxed and struggles to access public services without paying again.

Ideally we need to build a fairer society for us all and that means everyone paying their fair share and that must include one of the richest companies in the world.