Ireland’s government on Tuesday outlined how it intends to spend 13 billion euros ($14.4 billion) in Apple back taxes — a windfall that Dublin actually spent several years fighting to avoid.
In a bumper pre-election budget speech, Irish Finance Minister Jack Chambers said the recent judgement from Europe’s top court had provided the country with one-off revenue “that has the capacity to be transformational.”
Chambers said Ireland’s future economic performance would depend on how the country’s infrastructure program is prioritized and delivered over the next decade, adding it is “imperative” not the use the cash injection “for day-to-day expenditure or to narrow the tax base.”
“It is this government’s view that we should utilize these revenues to address the known challenges that we face in housing, energy, water and transport infrastructure,” Chambers said.
His comments come three weeks after the European Court of Justice (ECJ) ruled against Apple over its tax affairs in Ireland. The landmark decision, which the court said was final, said Apple must pay Ireland billions of euros in back taxes.
The ECJ’s ruling was welcomed by tax justice advocates, as well as the bloc’s outgoing competition chief Margrethe Vestager, who described the pronouncement as a “huge win” for European citizens.
Apple said at the time that it was disappointed with the decision, while the Irish government said that its position had always been that it “does not give preferential tax treatment to any companies or taxpayers.”
‘Infrastructure essentials’
Ireland’s finance ministry on Tuesday forecast tax revenue to come in at 105.7 billion euros this year, an increase of 13.6 billion euros from a previous estimate, primarily driven by corporate tax receipts and the revenue from the ECJ’s decision.
Ireland, which serves as Apple’s base in the EU, has one of the lowest corporate tax rates in the 27-nation bloc.
For years, the small EU member state argued that the iPhone maker should not have to repay unpaid taxes to the country. It had contested the case amid fears it may threaten the country’s ability to attract investment from companies eager to limit their tax bill on overseas earnings.
However, the ECJ’s ruling on Sept. 10 confirmed the European Commission’s 2016 decision that the country granted the U.S. tech behemoth “unlawful aid which Ireland is required to recover.”
Ireland, which must hold a general election no later than March next year, is currently in the unusual position of running a budget surplus of several billion euros, partly due to the strength of corporate tax receipts.
The Dublin Chamber, a lobby group which represents more than 1,000 businesses in the Irish capital, said it welcomed the commitment to invest the proceeds of the ECJ’s decision on “infrastructure essentials.”
“Ringfencing funds for vital capital projects is paramount, without the clear allocation of funds, all such projects are merely aspirational,” Dublin Chamber CEO Mary Rose Burke said Tuesday in a statement.
“We are glad to see that tangible, ringfenced funding for water, wastewater and electricity grid infrastructure has been agreed by [the] Government,” she added.
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