With the European Commission ruling that Apple owes Ireland €13bn (£11bn) in back taxes due to illegal tax deals, many fear the country will be seriously rethinking their membership. Branded Irexit, it comes as news of the latest round of UK Brexit negotiations fail to reach any conclusions in regard to trade, one of the key concerns for both British and Irish businesses.
Although member states are not allowed to give tax breaks to selected companies, the Irish government negotiated a deal which effectively saw Apple paying no more than 1% corporate tax, compared to the regular 12.5% rate in Ireland (BBC News). However, after a three-year investigation, the European Commission declared the arrangement illegal and ordered Ireland to recover the amount owing in back taxes. Although both Apple and the Irish government plan to appeal the decision, it highlights the issue of fiscal control for member states and questions the value of membership versus the lack of control.
In June this year, Irish MEP Brian Hayes clearly stated that any attempt to restrict the Republic of Ireland in terms of their corporate tax would not be tolerated and may result in Ireland following the UK’s Brexit footsteps (Irish Times).