ECJ upholds commission decision on apple tax case

ASI wasn’t huge outside of Ireland and that was ultimately at the heart of this decision. Irish advisers and Irish Revenue performed a one-sided analysis and came to the conclusion that the Irish branches did not own nor contribute to the management or exploitation of the IP such that the bulk of the profits did not belong to the Irish branch. The Commission effectively said a two-sided analysis must be undertaken such that they must positively prove that the “head office” actually made that contribution. The problem is that contribution was actually by Apple Inc in Cupertino and the ECJ has now determined that if the ASI head office (no employees, fixed assets or activity other than card meetings generally to deal with administrative matters relating to the company rather than in relation to the business per se) was not performing those functions then the profits must be allocated to the Irish branch and taxed here.

Ultimately those profits were generated by activities int he US but not taxable because of the US’s transfer pricing methods.

it’s not an own goal in the part of Apple or its advisers but the analysis will have implications for others which have assessed TP on a one-sided analysis basis.

But they are paying it here, so I have no issue. If they were not paying tax here I'd have a problem, but we're taking in money.

If the government are worried about how this will affect Ireland's long term attractiveness to FDI, one of our weaknesses is electricity prices and the length of time it takes to get connected to the grid. We should spend the entire 14 billion to fund modernising the electricity transmission infrastructure, installing the new substations, grid stabilisation and storage facilities needed to harness renewable energy in Ireland, and we will be in a position to attract and keep the industries of the future in Ireland while keeping our electricity prices low and having the potential to export services and energy to our neighbours, while combatting climate change.

meh

not under current law in any country. Digital service taxes and/or Pillar One would have to be enacted to give taxing rights to European market jurisdictions. The country which is losing out is the US which generally houses the companies which are entitled to the residual profit.

Romantic Ireland’s dead and gone, It’s with O’Leary in the grave.

The NICE referendum

No.

Dream On. Final judgement it's 14billion now with interesting. One thing for sure there will be some Manifestos for the general election now grants for everyone in the audience

Who gets the cash. Some people say it's ours others say its split between the EU.

We definitely have to

at this stage?There won't be any more appeals?

As much as I would like to see a metro in my life time I cannot support the building of one until we sort our planning laws and put the correct process in place. We can afford to spend 1bn-2bn euros per km, let's be realistic - that is what it will end up costing, when countries are building it for a fraction of that.

Of course it's bad for Ireland and it's credibility. There is now a precedent that if you have an agreed corporate tax strategy with the Revenue Comissioners, the EU can go "Nah, that's too good" and be forced to pay back taxes that you may not be capable of doing.

The ruling removes any MNC's confidence in the stability of Irish taxation policy and that the Revenue Commissioners opinions can be relied upon.

Ireland bent over backwards accepting EU policies that were not in our interest for the last 20 or so years in order to avoid taxation policy being examined. In the end they came for it anyway.

Now it's gone, perhaps the country can go back to pursuing it's own interests in non-taxation areas, instead of rolling over and accepting everything. I think over the coming years as the guard changes at the top, a more aggressive and self interested stance towards the EU will emerge.

Oh we have had the opposition going off on this again today. Here is MLMD:

"Ms McDonald said her party would spend the money on housing and infrastructure.

She said she was not concerned that the decision could have repercussions for Ireland’s foreign direct investment strategy, adding that the multinational sector chose Ireland for its education and talent base."

I think this could become a factor in the next general election. There are three knock-on issues. What parties do we trust to maintain our MNC corporate base, to manage and spend the €13bn and finally maintain our good relations in Europe. If we elect a party with a history of hostility to MNCs and the EU, and that has zero experience in managing those kind of sums, then we will deserve everything we get. The stakes are higher than they were a day ago.

Unlikely. Bumper tax revenue and ferocious inflation have only resulted in modest increases that don't track inflation.

This was a one off windfall. If the government decide to splurge it will be on a project, not current spending.

It's not tax policy they'll adjust, they will relocate.

There is no point locating here for low tax reasons if you have to keep a massive cash buffer available if the EU Commission can turn around and say they underpaid.

In the medium term some US administration is going to change corporate tax there to allow US companies to bring money overseas home at a favourable rate. When that happens, the game of warehousing IP in some brass plate office in Dublin will be over. And it will end suddenly, along with the taxes.

I don't think it'll have any great effect on multinationals leaving. It's not easy for many of them and they are still making a pile of cash here whilst paying proper corporation tax now.

I mean, its not like Intel can up sticks tomorrow and go elsewhere, they have a huge plant there now, it's not something they are going to walk away from soon.

Ridiculous suggestion. EU law cannot be subordinated to domestic law in any member state. Otherwise each country could pick and choose which rules it wants to abide by and which rules to ignore. That might be good for the big countries but it'd be terrible for the small ones.

Not only can we not ignore the ruling, why would we want to? It relates to a historical issue and international tax laws have changed quite a bit in the meantime.

Were they allowed to 'invest' the money in any conventional way? Maybe the the court ordered the government to leave it 'resting' in the escrow account, whatever that is…

Some commentator on the radio this morning said that the fund actually lost a couple of hundred million euro in value at one stage whilst it was in escrow.

Government should buy an iPhone for everyone in the country with the rebate

Chambers confirms it cost 10 million in legal fees to pursue a policy of refusing 13 billion euro.

Independent tax policy and sovereignty is the issue here.

And it looks like we don't have either.