IDA chief describes European Commission legal threat on Apple tax "unwarranted, unfounded and contradictory"

The chief executive of IDA Ireland has labelled the European Commission's threat to take legal action if Ireland fails to resolve the Apple tax controversy as "unwarranted, unfounded and contradictory", writes Fiachra Ó Cionnaith.

Martin Shanahan made the comment in a staunch defence of the Government position on the issue just 24 hours after Brussels announced it is taking Ireland to the European Court of Justice over the matter.

Speaking at the latest meeting of the cross-party Dáil public accounts committee in which he rejected concerns the stand-off could cause Brexit-fleeing companies not to re-locate here, Mr Shanahan said while he acknowledges the right of the European Commission to take action, he does not accept Ireland has done anything wrong.

Heavily criticising the approach from Brussels to date, he told Fianna Fáil TD Shane Cassells there is no reason to attempt to force Ireland into resolving the multi-billion euro tax stand-off.

"I do not believe that anybody has been negligent and I believe that it is an unnecessary step by the Commission. I also reiterate the Commission's initial findings were unwarranted and unfounded, and its own decision in this regard was internally contradictory," Mr Shanahan said.

The IDA Ireland chief executive said while it is understandable the issue has drawn attention in international quarters, there is no reason to believe the Apple tax controversy will discourage other companies from basing themselves in Ireland.

While accepting the "renewed attention" is not helpful, he said ultimately officials believe the disagreement will be seen as "more of the same" and will not impact unnecessarily on other firms' location decisions.

"Our current and prospective investors are well aware of the Apple tax issue and they will see this as a playing out of this issue and the Commission's previous findings.

"With regard to how that has impacted on investment, the results speak for themselves. Investment has increased and we have seen no diminution in investment since the Commission announced its initial decision in respect of Apple and Ireland.

"In the first half of this year, job approvals increased by 20% year-on-year and we have experienced the same high level of investment. There is nothing to signal that this is causing an impact.

"In my discussions with chief executive officers and senior leadership teams of companies, they are well aware of Ireland's position on this. If anything, they believe we have a consistent, stable and transparent tax regime, and Ireland will continue to have that," he said.

Meanwhile, during the same meeting Mr Shanahan was forced to defend IDA Ireland from claims it is repeatedly failing to ensure companies coming to this country base themselves in a number of locations instead of the greater Dublin area.

Asked by Mr Cassells why rural parts of the country effectively have to limit themselves to "back-office facilities such as those being provided by Facebook" instead of larger inward investment which can kick-start regional economies, Mr Shanahan said his organisation is doing everything it can to address the issue.

When it was pointed out to him that of the 323 IDA Ireland site visits this year, just 155 of them - or 48% - took place in Dublin alone and that five counties with "stubbornly high rates of unemployment" have been visited just once this year, Mr Shanahan controversially said:

"Achieving balanced regional development is the single biggest challenge which IDA Ireland faces, but it is also the single biggest challenge which Ireland faces.

"To be very clear, Ireland has one city of international scale - Dublin. Everything thereafter is below that threshold. We are putting this in an international context. These areas need to show that they are a nice place to live and work so that they can attract investors."

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