Is Ireland the victim of a “reverse mugging”? The EU Commission has told the Irish government it must collect €13 billion in back taxes, plus interest, from Apple; a record-breaking amount, 40 times larger than any previous tax demand the Commission has levied.
EU officials argue that Apple paid an effective rate of 0.005% on its European sales in 2014, funnelling most of its profits through a “head office” which was was based in no country, had no employees, and no physical premises. According to the European Commission, this amounts to “illegal state aid”, something which is in most cases prohibited by the EU treaties.
Some European politicians have been praising the tax ruling, with Austria’s centre-left chancellor arguing that it is wrong for multinational corporations to pay less tax than a typical Austrian sausage stand. For their part, Irish voters are divided about the move, with many upset that they have had to endure swingeing cuts to public services while big companies apparently pay such low tax rates.
However, the Irish government has said it doesn’t want the money, and is appealing the decision. Apple, which employs 22,000 people in Europe, has warned that the Commission’s decision violates Ireland’s tax sovereignty, and could harm the EU economy.
Should Apple be forced to pay the Irish government more tax? Is the European Commission interfering in the tax sovereignty of an EU Member State? Let us know your thoughts and comments in the form below!