Ireland's coalition divided over EU's tax demands on Apple

In-fighting has broken out among the ranks of Ireland's fragile coalition government over whether to fight against the EU decision to hand Apple a multi-billion-euro tax demand.

Although Finance Minister Michael Noonan has insisted that Dublin would reject EU demands ever since it first investigated the Apple’s Irish tax affairs in 2014, a cabinet meeting on Wednesday failed to persuade a group of independent lawmakers whose support is vital for the minority government to agree to fight the ruling.

The technology giant has been ordered to pay up to €13bn in tax to Dublin in a move that has angered Washington despite the fact that it was the first one to speak out over Apple’s tax regime.

The government said a decision whether to challenge the ruling laid down by European Competition Commissioner Margrethe Vestager, in which she said Apple's low-tax arrangements in Ireland constitute illegal state aid, would be made at Friday's cabinet meeting.

However, the Independent Alliance, a group of five lawmakers, has said it wants its senior coalition partners to commit to reviewing how tax is collected from Ireland's large cluster of multinational companies before it considers a challenge. Dublin has just over two months to lodge an appeal.

Any failure of the Alliance to come on board would cast doubt on the government's survival prospects. Another independent minister, unaligned to Alliance, also asked to delay a decision when Noonan sought approval on Wednesday.

Some Irish voters are astounded that the government might turn down a tax windfall equivalent to what it spent last year funding the struggling health service, and the left-wing Sinn Fein party has led attacks from the opposition.

But others worry a failure to appeal could put in jeopardy the one in 10 jobs provided by multinationals, who are attracted to Ireland by the country's low corporate tax regime.

Apple has already said it will appeal the ruling, and its chief executive Tim Cook warned on Thursday that if the Dublin government did not join it, this would send the wrong message to business in a country whose economic model depends in part on companies like his.

"The Apple ruling has brought some reputational damage to Ireland. There is no doubt about that. To restore this reputation, the Irish government has little choice but to appeal," said Dermot O'Leary, chief economist at Goodbody Stockbrokers.

Last month, Cook said that his company was looking towards artificial intelligence and augmented reality as the technologies that will become the cornerstone of its business in the future. 

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