BREAKING NEWS

Now Reading:

To take the money or not - Ireland delays decision over Apple tax cash

economy

To take the money or not - Ireland delays decision over Apple tax cash

Advertisement

ALL VIEWS

Tap to find out

Ireland’s cabinet failed to agree on Wednesday on whether Dublin should appeal against a ruling by Brussels that technology giant Apple has to give 13 billion euros of underpaid taxes to the government.

Independent lawmakers in the ruling minority coalition said they needed to know more about the consequences before they could back the appeal.

Regardless of what the Irish politicians decide, Apple is going to appeal and the case faces much legal and political wrangling.

The problem is in the long-term this windfall could be a poisoned apple, as Dublin has for years boosted the economy and created jobs by attracting multinational companies to take advantage of Ireland’s low corporation tax.

The fear is this ruling could cause an exodus of firms and discourage others from coming.

Top tax table

Around Europe corporate tax rates vary hugely. At the top of table are France (34.43 percent), Belgium (33 percent), Portugal (28 percent) and Italy (27.5 percent).

Following the Brexit vote Britain recently proposed cutting its rate from 20 to 15 percent which would put it close to Ireland’s 12.5 percent.

The rate in the United States is 35 percent while neighbouring Canada’s is just 15 percent.

More to come

The European Commission has criticised several countries for offering sweetheart tax deals to multinationals and the Apple ruling will certainly not be the last.

Euan Rellie, senior managing director at BDA Partners in New York, told Reuters: “Certainly more to come and no question the US targets are the most appealing targets, if nothing else, because they’ve got the deepest pockets. The US companies have been very efficient at doing business in Europe and not paying too much tax, and now the political climate demands that they pay tax going forward.”

Fair share

Rellie said the kind of disenchantment that led to the British vote to leave the European Union means Brussels wants to be seen to be defending its citizens, and making sure big multinationals like Starbucks, Amazon, McDonald’s and Google pay their fair share of taxes.

But he believes it could backfire, with companies reconsidering investing in the EU: “I think it’s a calculated decision by the EU that big tech companies are still going to want to do business in Europe. Having said that, if you have the choice of making an investment decision, putting down an R&D facility in Asia or the US, or Europe, you might choose to do it somewhere else other than the EU from now on.”

“Take the money”

Some Irish voters are astounded that the government might turn down the cash.

The money that Apple has been ordered to pay to the Irish government would cover the country’s health service bill for a year or significantly pay down the national debt. It is nearly a third of the total tax revenue collected there last year.

If split between Ireland’s 4.6 million people each would get 2,830 euros.

US anger

The US government has warned the Apple ruling could undermine US investment in Europe. “We think that it undermines the environment in Europe for international business because it creates uncertainty that ultimately will not be good for the European economy,” US Treasury Secretary Jack Lew said on Wednesday.

This has also become a presidential election issue, with Donald Trump proposing US corporation tax be cut from 35 per cent to 15 per cent, with a 10 percent rate applied to money held by companies offshore.

ALL VIEWS

Tap to find out

Every story can be told in many ways: see the perspectives from Euronews journalists in our other language teams.

Next Article