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Corporation Tax

Dáil Éireann Debate, Tuesday - 1 May 2018

Tuesday, 1 May 2018

Ceisteanna (90)

Michael McGrath

Ceist:

90. Deputy Michael McGrath asked the Minister for Finance if payments made by a company (details supplied) into the escrow account will be deemed to be Government revenue under European fiscal rules at the time the moneys are paid; if the escrow account will be deemed on or off-balance sheet; and if he will make a statement on the matter. [18755/18]

Amharc ar fhreagra

Freagraí scríofa

Notwithstanding the appeal in the Apple State Aid case and the difference in view between Ireland and the Commission on the issue, the Government is committed to complying with the binding legal obligations that the Commission’s Final Decision places on Ireland. Apple therefore must be deprived of the benefit of the alleged aid, which the Commission have estimated will amount to approximately €13 billion plus interest, as set out in EU Regulations on the recovery of State Aid. These sums will be placed into an escrow fund with the proceeds being released only when there has been a final determination in the European Courts over the validity of the Commission’s Decision.

Following consultation with the Central Statistics Office and Eurostat, it has been confirmed that there will be no impact on the General Government balance and that there will be no fiscal impact for the period in which the funds are in escrow.

This is because Apple and the Government are challenging the Commission’s Decision of August 2016 before the European Courts, and it could be several years before this is ultimately resolved. The basis for this is set out in the European System of Accounts 2010 (ESA 2010), Paragraph 20.189 which states:

When a court of justice rules that compensation must be paid, or a transaction reversed, resulting from or related to past events, the time of recording of the expenditure or revenue is when the claimants have an automatic and incontrovertible right for a given amount that can be individually determined, and when it is unlikely that claimants will fail requesting their due. When a court of justice merely sets a principle of compensation, or when the claims must be reviewed for eligibility and in relation to determination of the amount by administrative services, expenditure or revenue is recorded as soon as the value of the obligation is reliably determined.

As a result, the amount and timing are not recognised until a final judgement before the European courts.

Question No. 91 answered with Question No. 89.
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