Ireland’s governing coalition is split over whether or not the state should immediately appeal against the European commission ruling ordering Apple to pay €13bn (£11bn) in back tax to the Irish government, and will hold further talks later this week before reaching a decision.

As the cabinet met in Dublin on Wednesday, it emerged that the Independent Alliance, some members of which are government ministers, was not prepared to back an appeal. The group of TDs helps shore up the minority Fine Gael administration.

There was also a suggestion that the bill could be as much as €19bn after interest is added. Speaking on RTÉ Radio, Eamonn O’Dea, the head of Revenue’s international division, said the total tax to be paid “could be at that figure, at max[imum].”



The Irish finance minister, Michael Noonan, is strongly in favour of appealing against the ruling. After the European commissioner for competition, Margrethe Vestager, said on Tuesday that Apple’s sweetheart tax deal with Ireland constituted illegal state aid, Noonan vowed to immediately appeal against being forced to take the €13bn payment.

He insisted that Ireland had to preserve its status as a low-tax base for overseas companies. The country has a corporation tax rate of 12.5%, less than many other EU nations, but made deals with Apple allowing the world’s most valuable company to pay tax on profits at a maximum of 1%. In 2014, Apple paid tax of 0.005% in Ireland, or €50 on every €1m in profit generated.

Credit ratings agency Standard & Poors pointed out that an injection of €13bn would reduce Ireland’s debt significantly, but warned that it could undermine the government at the same time.

Moritz Kraemer, S&P’s chief sovereign ratings officer, told Reuters: “There are many uncertainties ahead, but if we assume that the money will definitely come through, the sum of €13bn is not insignificant for an economy the size of Ireland.”

He said it was equal to more than 5% of Ireland’s gross domestic product and would allow the country to bring its debt down to about 85% of GDP, providing that the government uses the payment for that purpose alone. Ireland’s debt is currently at 94% of GDP.

Kraemer said the ruling presented a political risk to the Irish government. Accepting the Apple billions could undermine the low-tax business model and the recent success of the Irish economy, but not doing so might be very unpopular with voters, he said.

Fine Gael ministers have been lining up to support Noonan’s call for an appeal against the EU ruling. They also fear that alienating Apple would cause Ireland reputational damage and put off other multinational technology companies from investing in the country, and using it as their European headquarters.

Speaking ahead of the cabinet meeting, Paschal Donohoe, the minister for public expenditure, said he believed “strongly that what we need to do here is to appeal this ruling, but before we get to that point, cabinet needs to first understand this matter, and that’s what we’ll be doing”.

But Independent TDs and ministers including Shane Ross are reluctant to endorse any move to appeal the Apple ruling in Brussels. The Independent minister Katherine Zappone suggested that an appeal may not be on the cards immediately.

“Maybe there is a role for the Oireachtas [the president and the two houses of the Irish parliament] and the public accounts committee in this,” she said. “It is really important that we take the time before we make a decision in relation to this. I’m going in having these questions and concerns that I am bringing to cabinet, but we probably need more time.”

The possibility of an Apple tax payback of €19bn presents a major political headache for Enda Kenny’s government. Such a tax windfall for the Irish exchequer would be €6bn more than the annual health service budget.

On the streets of Dublin, opinion was divided on whether the Irish government should take the money or appeal against the ruling.

Carer Louise O’Reilly, 57, said the government should not appeal. “They are doing the wrong thing. They don’t care about the normal people. The money should be spent on the old-age pensioners who worked all their lives and are struggling to survive,” she said, adding that her mother paid €10 in tax on a monthly pension of €1,050, a higher rate than Apple on its multibillion-euro profits in 2014.

Security guard Gerard Augusta, 56, said the government should take Apple’s money and put it into housing and hospitals. “I think the unions and the workers should be out marching about it, to be honest with you,” he said.

Others worried about how the ruling would affect a country where 10% of workers are employed by multinational corporations.

Software developer Conor Moran, 30, said: “The big thing is to make sure the big corporations keep coming to Ireland. As mad as it sounds turning down that kind of money ... I think in the long term, it might be more beneficial. We have to do whatever we can to get jobs here.”

Apple’s chief executive, Tim Cook, also intends to appeal against the bill. “The European commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system,” he said on Tuesday.

The company has been based in Cork since the late Steve Jobs opened up a facility there in 1980. It employs 6,000 people and is planning to expand the plant, with another 1,000 workers expected to be recruited.

