The European Commission is out of bounds in demanding Apple pay a massive back tax bill due to its Irish operations, but don’t expect the rift to cause Ireland to exit the Eurozone over it, said Martin Shanahan, CEO of IDA Ireland. ‘We do not believe this money is owed to Ireland,’ said Shanahan. ‘Our revenue services said very clearly that all taxes due to be collected from Apple have been collected for the period of time in question.’ Apple was ordered to pay ?13 billion ($14.5 billion) in back taxes to Ireland under a European Commission ruling last month. Both Apple and Ireland are appealing the decision in a process that Apple warned could take several years but with no impact on its cash balance or future tax rate. Apple has operated continuously in Cork since 1980 and today they employ nearly 6,000 people across Ireland. Amid a wider crackdown against corporate tax avoidance in the 28-nation bloc, the EC said that ‘undue benefits’ granted to Apple amounted to illegal state subsidies, and will need to be recovered. EU Competition Commissioner Margrethe Vestager insisted that the ?13 billion is not a penalty, but unpaid taxes to be paid, and has to do with Apple’s profits generated in Europe and recorded in Europe, adding that it is now up to Ireland to recover the amount. Vestager also hinted that Apple could potentially be on the hook for further taxes in other jurisdictions, saying that governments in the EU and elsewhere could look to the latest decision and the yet-to-be-published reasoning to determine whether to require Apple to pay additional taxes. But she said any back taxes due elsewhere could theoretically reduce the Irish tax bill if related profits should have been booked in other jurisdictions. The Commission has acknowledged that the decision does not call into question Ireland’s general tax system or its corporate tax rate. ‘Ireland has one of the most transparent and consistent and competitive tax systems in the world and we are unapologetic about the fact that we are competitive,’ said Shanahan. ‘We have a pro-business environment and we believe we need a pro-business environment to win investment.’ Despite the back and forth, Shanahan does not believe the rift will cause Ireland to break from the European Union as Great Britain voted to do earlier this year. ‘We fundamentally disagree with the European Commission on this issue but we are committed to Europe and the European project,’ said Shanahan.
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