#Guest Contribution: Shower of Cash


A tax-bitten Apple

Today, we are publishing the first of a new series of posts, together with our partner eurotopics. In a total of three articles for re:publica Dublin, eurotopics will illuminate some of the topics that are most relevant to Ireland, and to Europe as a whole. Part one is about the tax issues Apple is currently facing in Ireland.

Just imagine if a very important institution, something like the government of Europe, condemned a very wealthy US company to pay a lot of money to a small EU member state – and this country would fight like mad to prevent receiving that money. Unbelievable? Of course not. Because that is exactly what happened here.

On August 30, Margrethe Vestager made an announcement on Twitter stating that Apple had for years been benefiting from tax arrangements which had in fact been thinly disguised state subsidies: “Irish tax rulings to Apple are illegal state aid. Effective taxation as low as 0,005 pct.” She decided to make the US company pay Ireland back 13 billion euros in taxes.

And it looks like the EU Commission's decision from late August is just be the beginning. Meanwhile EU Competition Commissioner Vestager has already announced that she has several other US companies on her most-wanted list, including Amazon and McDonald's. So corporations from the other side of the Pacific seem to be getting nervous – in a letter to the EU in mid-September, they argued that the decision against Apple should be revoked.

But even in Ireland, people are less than enthusiastic about the EU claims. Irish Finance Minister, Michael Noonan announced his decision to appeal against it, shortly after the EU Commission verdict, and Parliament seconded his advance. So Ireland is protesting against a shower of cash that it could really use well, or at least that's how the daily Irish Examiner sees it, wondering whether politicians are now finally out of their mind.

But why doesn't the chief treasurer want the money, in fact? Of course, there is risk of losing its competitive edge, should Ireland start demanding reasonable taxation of corporations like Apple, like any other EU country does. Or as the Irish Times puts it, there is no alternative for Ireland other than to appeal against the Commission's decision, precisely because it has its image as an attractive investment location to lose.

Apple's take on things is clear enough: the company doesn't want to pay back any taxes, when they have been abiding by the law the entire time. After all, how should anyone plan future investments unless it is apparent whether an enterprise will be pestered with tax demands from the EU some time in the future? The Economist agrees with Apple in this case, and goes on to explain what the EU Commission could do instead to facilitate fairer taxation in general.

Of course, the whole drama is not just about Ireland. It is not just about Apple. As always, when a conflict seems inextricably tangled, it is about so much more. Take the EU for example, struggling with its prestige as an institution and hoping to win back some points from the European population by taking on US tech giant Apple. The EU needs its successes, and Ireland needs Apple. But Ireland also needs the EU more than ever, which is why the Irish Independent recently warned against ruining matters with the EU altogether.

And how will the story end? The tax dispute between the EU and Apple will be negotiated in court from now on, and will most likely drag on for years. If Ireland isn't thrown out of the EU in the meantime, as a couple of European politician have now been suggesting.

Image credit: www.directline.com (CC BY 2.0)



Twenty-six foreign correspondents follow the key debates in Europe and comb through the commentary pages of influential media for the euro|topics international online press review. All the selected opinion pieces are available in German, English and French. The eurotopics press review has been contributing to the formation of a European public sphere since 2005, and has a constantly growing archive of more than 30,000 commentaries. An index of roughly 500 newspapers, online portals and blogs provides broad access to Europe’s media landscape. The journalists’ network n-ost has been producing the daily press review on behalf of the German Federal Agency for Civic Education since 2008.