Outcome will define us for decades - EC report on Apple tax fine

THE publication yesterday, by the European Commission, of its full ruling in which it concluded that Ireland offered computer and cultural behemoth Apple up to €13bn in illegal state aid intensifies a dispute that will take years, maybe even the bones of a decade, to resolve. 

In the interim, the high-stakes disagreement will undermine important relationships between this country and the EU, the EU and America, this country and America. It will also limit our capacity to offer certainty to those who might invest in this country.

The ruling will also support the argument, made so strongly last week by Oxfam, that Ireland is a top-tier tax haven offering sanctuary to international business in a way that undermines this and other societies. Though the Government rejects this charge — one supported by a US Senate committee and the UN — the zeitgeist suggests the Government’s refutation hardly rings with the credibility that might win the day. This, unfortunately, will further damage our body politic and the faith those who confront inequality can have in it. It also means that we, or at least our Government, will face accusations that they preside over a tax haven until the issue is finalised. It will also unsettle the conscience of the great majority of Irish people who want to believe that this country is a reliable, compliant international citizen rather that a bolt-hole destination facilitating the most aggressive tax planning. This behaviour once won us the unenviable title of “the Wild West of European finance”.

What an awkward, unappealing Catch 22. By asserting a position to support and attract the international businesses we depend on, we disappoint those working, in the name of social justice, to establish a trans-border tax system that is fair to business but protects the expectations of societies. We also disappoint those working at European level trying to close the loopholes that allowed Apple pay less than 1% of its turnover routed through Ireland in taxes. One of Apple’s subsidiaries based, in the very loosest terms, in Ireland had a turnover of €25bn in 2014 but paid only €10m in taxes on that spectacular figure. Dress it up as you may, it is immoral to defend a tax system that legitimises such a minuscule tariff.

This showdown was inevitable. For many years the impression that multinational corporations had moved beyond the control of national governments, especially small, job-hungry ones on the periphery of what every economic federation they were members of, has gathered momentum. Already, Fiat, Amazon, MacDonald’s and Starbucks are involved in similar actions.

There is a new impetus on this issue. A month from today the billionaires’ collective, that Donald Trump intends to install as his cabinet takes office, have signalled their intention to intervene on this issue in a way that serves America’s interests first, irrespective of consequences for others. We must try to imagine too how Brexit might move these goalposts. The challenge of protecting our interests without being defined and shamed as a tax-haven pariah has moved to a new, game-changing level. How this confrontation is resolved will have implications for decades to come.

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