If you were only paying only 0.05% in taxes you might worry that you’d done the maths wrong. Not Apple, apparently.
The European Commission has ruled that Apple must pay Ireland up to €13 billion in illegal tax advantages granted to it over 13 years. In response, Apple has held up its hands and claimed it had no idea it was doing anything wrong. This despite funnelling nearly all its European profits through a company that had no employees, no premises and was not registered in any country.
Today’s ruling that Apple must now repay Ireland the money is a victory for ordinary people who pay their taxes and expect multinationals to do the same. The money, which represents the equivalent of the entire annual budget for the Irish health service, should be used to bolster public services in Ireland and around Europe.
Indeed, the Commission has invited other countries to take a close look at the decision. If they believe that some of the lost money should have been paid in tax in their own country, they should present Apple with their own demands for repayment.
Apple’s tax dodging is brazen, but just one example of how multinationals play countries off against each other and exploit endless loopholes to get away with paying what they owe. Nor is Apple the only corporation under investigation. The Commission has already said that it suspects McDonald’s of having used a Luxembourg-based company to avoid paying taxes in Europe. The final decision is still pending but the report that sparked the probe, co-authored by EPSU, estimates the figure could be as high as €1 billion.
Apple’s response to today’s decision reeks of the same blackmail often employed by McDonald’s when challenged on their taxes. Multinationals create jobs and bring investment, so don’t dare challenge them on their tax arrangements or they’ll go elsewhere.
It’s a bluff and it’s about time governments called them on it. Multinationals take full advantage of the skilled workforce, infrastructure and services that taxes pay for. They should pay a fair contribution towards them.
More action needs to be taken at European and global level to stop this race to the bottom where multinationals can pick and choose tax advantages worldwide to reduce their tax bills. In the meantime, to restore a bit of fairness to the system, it’s imperative that companies like Apple and McDonald’s are made to pay what they owe.