Tuesday 30 August 2016

£13 billion fine for Apple for Irish Sweetheart tax deal

A big fine, worth around €3250 to each Irish citizen.


The US are already unhappy because Apple plays as little tax as possible in the USA and is now daring to pay some in Europe too. Not that Apple will mind, might be quite a relief given the huge cash they have built up and limited investment opportunities open to it.


What of Ireland though...the EU is clearly stepping in, rightly, to stop a sweetheart deal in an economic zone of freedom of capital movement. Other companies may be dissuaded from signing such deals and moving there in the future.


Which all makes sense in the EU zone. It does present an opportunity for the UK; attract Apple with a low rate sweetheart deal and get them to base in the UK post-Brexit. Exactly the kind of mercantilist policy Germany has been using for years via the EU.


Interesting choices for Ireland coming up,  its corporate back taxes, it should go to Ireland, but no doubt the EU will try and claim it as a fine for the EU coffers.


All this on a day when France followed Germany in pulling out of TTIP trade negotiations with the USA too. Brexit shares still moving up, EU ones down.

14 comments:

Nick Drew said...

well my objective-setting for David Davis includes "get a deal so good, the Irish should seriously consider joining us"

becomes less and less far-fetched

Raedwald said...

I have nothing but questions;

What of that corrupt crooked little failure kicked out of his own nation's politics for fraudulent behaviour - the notorious drunk Herr Juncker? While in power in Luxembourg he built a large number of sweetheart tax deals for some of the largest global service cos on the planet - will the EU now be after Amazon, Ebay, Starbucks and the rest for billions in back taxes?

And what of the other multinationals headquartered in Ireland - some legitimately, such as Dell? Surely they are now talking to their lawyers?

The global tax avoiders must now be looking at the EU in a different light - as treacherous liars who renege and welch on deals.

So, I'll bet London's lawyers (the best concentration of legal and commercial talent in Europe) will now be looking at a bonanza of tax litigation in addition to the Brexit work (and I stand by my recommendation that we should be budgeting a billion in fees) so good times ahead ..

But will our tax and trade bods be quick enough off the mark to attract here all those nervous globals with offers of probity, stability and the honouring of trade and tax deals?

Dick the Prick said...

I think there should be some note of worth that HMRC are (almost) criminally incompetent. Also, that Britain uses tax havens better than everyone already. I dunno - this judgement seems like grist for the cheap seats if that's not mixing metaphors.

dustybloke said...

Wow.

"Grist for the cheap seats"

A metaphor that's been through the mincer, the blender and then the Jamie Oliver food processor.

dustybloke said...

Silly Apple.

As any fule no, the way to do business in the EU is to invite a Commissioner to spend a week on a billion dollar yacht.

The company then gets a good deal from the EU and the Commissioner, well, he seems to move into a multi million pound house when he retires.

Anonymous said...

Curious to know how this will effect the thinking of the slew of businesses looking to relocate their HQs to Ireland after Brexit... Not good politics for the EU, handled really cack-handed. The Irish knew the rules, as did Apple, so the EU were always put a stop to any sweetheart deals, but the way they've gone about it is amaturish.

James Higham said...

Can't see them paying that.

Thud said...

The Eu lashing out (there will be more) augurs well for us that see its ultimate demise.

Elby the Beserk said...

Interesting article from the Irish Independent (related? I have no idea) which casts a very different view on this. Do read

http://www.independent.ie/opinion/columnists/david-mcwilliams/david-mcwilliams-eu-is-a-thing-of-the-past-our-future-is-with-an-atlantic-ireland-35009330.html

Electro-Kevin said...

It's the price of being in the EU. A nation cannot be allowed to settle its own deals.

The EU may argue that the tax will go to The People and I'm sure some of it will - most of it won't. I start my analyses from the presumption that the EU is corrupt and redistributive - it often spreads the wealth away from where the work is actually being done.

The EU is socialist and is failing as socialism always does.

Some argue "Apple want to base themselves in Ireland then they should contribute more to Ireland's structural stability" I'm sure Ireland would prefer the jobs and settle for the revenues they bring, plus a little bit from Apple - better than nothing at all.

A pro Ireland/Apple contributor on the news today argued that the tax arrangement is "...not fair, but why does it have to be ?" and he's almost right.

I argue that he should substitute the word 'fair' with 'equal'. The arrangement is " ... not equal [to ordinary worker's taxation], but why does it have to be ?" and then this makes a lot more sense.

OK. If the worker insists on equality with Apple then the chances are he won't be a worker for much longer. What would he prefer ?

The only time I would object is when a company wants to pay near zero tax and also demand us to be part of freedom of movement so that it can enjoy low labour costs subsidised at the expense of the ordinary taxpayer.

Those companies we can do without and the sooner the better.

Their economic offerings are entirely false and our debt and deficit proves it.

CityUnslicker said...

great comments all. Weird that the EU is both doing the right thing, but by doing so demonstrating how annoying it is to be signed up to a supra-national body.

Electro-Kevin said...

Even here I think the EU is doing the wrong thing.

It wants to risk Ireland's position by demanding a tax which will see revenues distribute away from the centre where the graft was done. It is for the good of 'the project' and for those not doing the work.

As with a Tobin Tax on our City.

Great. Londoners get to put up with the congestion, the crowding - the graft, and then see their money sent off to people sunning themselves in southern EU states, where the EU has failed abjectly and most obviously.

They could claim the money could go towards containing Mediterranean migrants but the situation at Calais shows the whole intention is to release pressure via a migrant trail to London - which our own government is in on too. But this situation is a failure on the EU's part and entirely its fault.

Nothing the EU does comes to any good. It doesn't deserve a penny.



Lord T said...

From what I understand it is not a fine it is a declaration that Ireland gave them a tax break and the greedy tax man wants it.

It'll be interesting bto watch as it screws up Irelands low tax economy in one go. If Apple end up paying it, or even a fraction of it after appeals to the courts then many firm will bypass Ireland and hello UK, an opportunity for us if our tax people were not so greedy.

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