Ireland’s Apple Tax Woes Belie Tax Reform Work, Noonan Says

(Bloomberg) -- Irish Finance Minister Michael Noonan hit back at the European Union after it ordered him to recoup a record 13 billion euros ($14.7 billion) from Apple Inc., saying his country is leading the way on countering tax avoidance.

“Ireland is leading, is one of the leading countries in the reform of tax,” Noonan told reporters Friday on his way into a meeting of his euro-area counterparts in Bratislava, Slovakia. “We’re the first country to agree revenue-to-revenue exchange of information.”

The meeting is the first of finance ministers since the European Commission made the ruling, accusing Ireland of illegally slashing the iPhone maker’s tax bill between 2003-2014. Ireland and Apple have said they plan to appeal the decision in court. Apple CFO Luca Maestri said the 13-billion figure was a “completely made up number.”

Apple Issue

While last month’s decision by the commission -- the EU’s competition authority -- is not on the agenda of the two-day meeting, finance ministers are scheduled to discuss counter-tax evasion measures more generally and the Apple issue may come up informally.

“We are in a kind of a judicial phase, so I don’t expect a lot of comment on this at the open sessions of the meetings,” Noonan said. “But of course there will be a lot of conversations on the side.”

A draft of a document obtained by Bloomberg News to be circulated in the meeting urges finance ministers to consider further ways to clamp down on tax dodgers. The introduction of measures to tackle double non-taxation must be combined with efforts to avoid undue uncertainty in tax policy and administration, said the draft, drawn up by Slovakia in its role as holder of the EU’s rotating presidency.

“The policy of reducing excessive use of diverging tax rules is a common one we’re pushing hard in Europe,” German Finance Minister Wolfgang Schaeuble said as he entered the meeting.

The EU had advanced the Organization for Economic Cooperation and Development’s Base Erosion and Profit Sharing initiative and if it had been introduced sooner the Apple case “wouldn’t have happened the way it did,” Schaeuble said.

The EU tax system needs to promote certainty, Luxembourg Finance Minister Pierre Gramegna said in an interview in Bratislava. His country was accused in 2014 of approving hundreds of tax deals for multinational corporations when leaked documents indicated that more than 340 companies transferred profits to the country through tax arrangements.

“Enterprises need to be able to plan ahead and the system must be such that you can arrange it so that you can ensure planning certainty for companies,” Gramegna said.

--With assistance from James M. Gomez To contact the reporters on this story: Jonathan Stearns in Bratislava, Slovakia at jstearns2@bloomberg.net, Rainer Buergin in Bratislava, Slovakia at rbuergin1@bloomberg.net, Ian Wishart in Bratislava, Slovakia at iwishart@bloomberg.net. To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Kevin Costelloe, Andrew Atkinson