The future of Apple's data centre for Athenry would not appear to be in jeopardy, despite the EU Commission's demand the company pay €13 billion in unpaid taxes, and Government fears the decision could harm future of job creation and multi-national investment in the State.
The decision, announced by the EU commissioner for competition Margrethe Vestager, comes less than three weeks after An Bord Pleanála granted permission for Apple to proceed with building its €850 million data centre on a 500 acre greenfield site at Derrydonnell, near Athenry.
Almost instantly fears were raised that the EU's decision could derail plans by Apple for investment in the State - especially as the new centre, is set to be the company’s largest data centre project in Europe. It will be operational in 2017, will provide 150 direct jobs, as well as employment during construction.
However the company's chief financial officer Luca Maestri said the company's plans for Ireland remain on course.
"We have an outstanding relationship over the years with the Irish Government and we are verya committed to Ireland," he said on Tuesday, followed by a statement many will read as referring in part to Athenry. "We have recently made additional investments in the country, and our plans to invest in Ireland have not changed." However he did say the EU's decision would make multi-national firms have concerns in the future about making investments in Europe.
Ireland has become popular with companies wanting to establish data centres in Europe due to its energy and connectivity infrastructure, and, above all, low corporate tax rate. A report published by global data analyst group 451 Advisors in 2013 predicted Ireland’s data centre industry would overtake Britain and mainland Europe, with a growth rate of 18 per cent over the coming years.
As a result, there are many forces willing to support Fine Gael's determination to appeal the EU's decision. However the Government is divided on the issue, as the Independent Alliance has, so far, refused to endorse this position.
Galway East TD and Minister of State Sean Canney said the Independent Alliance would not make "any rash judgments. We need to look at this carefully". However Roscommon-Galway TD and Minister for Communications, Climate Action and Environment, Denis Naughton - who is not a member of the Independent Alliance - has indicated he is supportive of the appeal, and added that as Ireland has set low corporation tax rates, it must be prepared to defend them.
The EU's decision has thrown open a series of uncomfortable issues. The State has now been exposed as both having, and being determined to continue, arrangements that allow multinationals to avoid paying large amounts of tax. The decision to appeal the EU ruling also exposes the Government as refusing a €13 billion windfall in the face of unprecedented crises in housing and accommodation, child poverty, and healthcare.
However the decision has also prompted concerns about the motivation of the EU, with Brussels long seen as determined to force Ireland to hike its corporation tax. This in turn also raises concerns over the appropriateness of the EU in interfering in a state's ability to set its own taxes; and reinforces concerns that the EU's interest is in protecting the welfare of core member states at the expense of smaller states.