Economy

Multinationals not alarmed at Apple tax judgment, head of IDA says

Michael Lohan more concerned at State’s infrastructure shortfall amid growing international competition for foreign direct investment

IDA Ireland chief executive Michael Lohan told the Dublin Economics Workshop that multinational clients had not been alarmed by Apple tax judgment. Photograph: Conor McCabe
IDA Ireland chief executive Michael Lohan told the Dublin Economics Workshop that multinational clients had not been alarmed by Apple tax judgment. Photograph: Conor McCabe
Eoin Burke-Kennedy
Fri Sept 13 2024 - 16:09

IDA Ireland has rejected suggestions that this week’s Apple tax ruling by the Court of Justice of the European Union (ECJ) had damaged Ireland’s reputation internationally.

Chief executive Michael Lohan said that while the judgment was historic, it was not being raised by client companies.

“Clients aren’t raising it at this juncture,” he told the annual meeting of the Dublin Economic Workshop in Wexford.

“What I’m hearing, and obviously I’ve been speaking to clients this week, clients look to the certainty that is in Ireland, they look to the fact that we’re fully compliant from an OECD perspective and they’re looking forward,” he said.

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“I think investors will continue to look forward in that context and look at the opportunity that Ireland brings from a policy perspective and a skills perspective,” he said.

Mr Lohan was speaking the wake of the ruling which upheld a previous determination by the European Commission that the iPhone giant owed Ireland €13 billion, plus interest, in back taxes. The ruling ended a long-running legal wrangle between Apple and Brussels that once again placed Ireland’s tax regime in the spotlight.

Earlier, Mr Lohan warned delegates that Ireland’s relative competitiveness in terms of attracting foreign investment was “under strain”.

Global competition for investment had intensified “as more countries use industrial policy to attract FDI [foreign direct investment] and geopolitical tensions result in regionalisation of investment”, he said.

Some countries were offering investors up to 50 per cent of their capital costs up front for locating there, he claimed.

Mr Lohan singled out shortfalls in infrastructure as a key problem for the State. While Ireland ranks well internationally in terms of technological, health and education infrastructure, it ranks a lowly 38th for basic infrastructure according to the latest IMD World Competitiveness Ranking, he said.

And while spending on public infrastructure has increased steadily above European Union averages since 2017, delivery has been “constrained by supply shortages and planning”, Mr Lohan said.

“Public investment in infrastructure is one of the key enabling conditions for FDI, resulting in lower costs and improved competitiveness,” he said.

“Ireland’s success is built on a strong value proposition: including an open, stable environment; EU market access; availability of high-quality talent and a 75-year track record of success in FDI,” Mr Lohan said.

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Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times

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