Apple tax ruling for Ireland shines light on global tax avoidance
Editor’s note
Apple must report using GRI-207: Tax. All companies must be responsible and support the economies and people on which they rely for growth and profit, by ensuring they pay the same level of taxes as the majority of companies. Businesses cannot succeed in societies that fail and cannot properly fund schools, hospitals and other important infrastructure.
Last week Ireland welcomed a court ruling that denied it more than €14 billion of Apple money in back taxes. Tweet This!
The sight of a national government going to great legal lengths to avoid receiving billions in tax, cast a light on how Ireland treats multinational companies, especially those from the US, as regards tax. A 2018 study by the University of California, Berkeley and the University of Copenhagen referred to Ireland as “the world’s biggest tax haven.”
So, is Ireland a tax haven? Yes, according to Liz Nelson, director of the Tax Justice Network, an NGO campaigning against global tax avoidance and tax evasion.
The Irish Department of Finance did not respond to a DW request for comment, but the Irish government argues that it taxes companies correctly, according to its own laws.
Here is a portion of a statement Apple provided to DW, which was originally issued after the court verdict:
“We’re proud to be the largest taxpayer in the world as we know the important role tax payments play in society. Apple has paid more than $100 billion in corporate income taxes around the world in the last decade and tens of billions more in other taxes. Changes in how a multinational company’s income tax payments are split between different countries require a global solution, and Apple encourages this work to continue.”
According to Nelson and Eduardo Baistrocchi, a professor of tax law at the London School of Economics, the problem is global.
Baistrocchi argues the tax-hub model is not prohibited by the international tax regime, and adds: “However, it is triggering an ongoing clash between globalization and democracy because of the increasing inability of tax systems to address problems of inequality within countries. This clash has been producing, in turn, electoral shocks in both the developed and developing world such as Brexit, Trump and Bolsonaro.”
He argues that the international tax regime is “broken” because of the power and influence of huge multinationals, such as Apple.
The OECD has been working on striking a global deal on taxation, aimed at curbing multinationals from avoiding tax in the various countries in which they operate.
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