The Republic of Ireland has been trying very hard not to collect €13 billion in taxes from Apple – whose European HQ is in Cork.
Last year, the European Commission ruled that the Republic had given the tech giant illegal state aid (by collecting only a tiny fraction of the corporation tax that could have been paid).
However, with the Irish government mounting a legal fightback, the $13 billion has been sitting in escrow, paid over by Apple but not collected by the taxman. However, according to the BBC, the Irish have now conceded and will collect the money.
This might seem like the hollowest of defeats, but, as the BBC report explains, the downside for the Republic could exceed the upside:
“Ireland’s reluctance to collect the taxes from Apple is partly because it believes it may damage its reputation as an investment destination which has attracted multi-national companies such as Apple, Intel and Pfizer…
“Another reason for Ireland’s refusal to accept the Commission ruling is that all the funds may not necessarily end up in Irish government coffers.
“The Commission has said that other countries could claim part of the tax if they believe that sales (and other activities) ‘could have been recorded in their jurisdictions.’”
This is another big victory for Margrethe Vestager, the EU’s competition commissioner. Harriet Maltby profiled the Danish politician for UnHerd earlier this year — detailing her crusade against various forms of crony capitalism, including tax avoidance.
Her latest success will embolden wider EU efforts to force the tech giants and other multinationals to pay more tax in the countries where they generate their revenues. If successful, this could be even worse news for the Irish economy, which has done very well out of its corporate-friendly tax environment.
As if Ireland doesn’t have enough EU-related headaches right now.