Not because I particularly dilike Apple or big US tech firms (I have a whole bunch of Apple stuff right here), but because Ireland has been able to undermine the tax regime of the whole EU, by giving these sweetheart tax deals to big firms, who can then run their entire EU business from there.
This gives an unfair tax advantage to the multinationals over homegrown EU companies, skewing the market.
Is it Apple's 'fault'? That's not really the interesting question here, IMHO.
The secrecy and exclusivity were central to the judgement. The EU requires a level playing field for all companies, which is why individual governments striking secret tax deals not available to all companies are seen as an illegal thing.
I bet if Ireland had opened the same tax deal they did to Apple, to all companies this would not even have been a matter for the courts.
The problem was not about the tax level, nor the inter-state competition. The problem was that it was _not_ a free and fair competition. The tax deal was not offered to all companies. Ireland secretly did this to only select companies, and it therefore crossed the threshold into [secret and illegal] state aid.
VAT is paid on the gross margin on each transaction. It only looks like the end user is the only one to pay because for that transaction the gross margin is the whole of the price. Car makers are to a large extent assemblers of ready made parts so some, admittedly small, VAT is certainly paid at various points in the supply chain.
https://en.wikipedia.org/wiki/Value-added_tax#Comparison_wit...
This level playing field lasts right up to the point where each individual government of the Eurozone is mandated to cover the losses of their private sectors, including banking. The days of Germany dictating to their neighbours how their countries should be run are over outside of the ECB and the Euro. If they have a grievance then they can go through the EU courts like Germany did with the Apple case.
Big countries signed up to a common market without tax harmonisation and they would leave if it wasn't working for them, just like the UK did.
Guess which country was forced to bail out Europe's banks and unsecured bondholders in the last crisis? We also don’t benefit by the setting of ECB rates like Germany does, and we're going to get slammed as they rebalance their books following pandemic social payments.
Ireland gets the blame for Apple not paying its fair share of taxes but the issues is entirely a US one: Apple is a US company, yet the US won't force Apple to pay taxes on its foreign earnings. In contrast, if you're a US citizen who resides elsewhere, you're still expected to pay US taxes...
In France the statutory corporate tax rate is 33.3% while the actual effective tax rate is lower than Ireland's 12.5% at 8.2%.
Luxembourg has a statutory rate of 22.5% but an effective rate of just 4.1%.
https://taxfoundation.org/data/all/eu/patent-box-regimes-eur...
In Luxembourg, it's higher at 5%.
I remember Netherlands had 0% at some point, but they might have changed it.
In any case, multinational corporations pay peanuts in taxes using that scheme.
btw: I also agree with your economic reasoning
Not 100% sure if its illegal, but its highly amoral, no questions there. Here in Europe we don't like that, money is not above else, greed is not good.
The view on this topic boils down largely where your opinion on above stands.
At the end, Apple is just another greedy amoral corporation, just like the rest. Which is fine on its own, but would be nice if some folks would be less fanatical about that brand and got a bit more... balanced view on reality.
Also "money is not above else, greed is not good" is absolutely not the policy of the major economic powers in the European Continent. The 2008 banking crisis and the subsequent austerity imposed on Ireland by the IMF as a consequence of bailing out unsecured bondholder in European Banks in order to stop a contagion effect completely refutes that notion.
Here in Europe competition is good and you have some countries that don't like losing out.
Not by committing tax avoidance.
This is why stronger regulations and tax laws are welcome. I fully expect every corporation to pursue profit no matter how illegal their actions are, and no matter gow much damage they cause to society.
Well, that's absolutely not orthogonal to the "screwing over Europe" statement. That simply makes two countries trying to gain an unfair competitive advantage.
Nicely hypocritical from the Netherlands by the way, as they are always the ones on their high horses complaining about the financial laxness of the southern and eastern European countries, while at the same time draining them of tax revenues through such constructs.
But hey, we voted for these muppets. So if the EU again fines us we deserve it.
Hope dies last! Let's see how long the current government holds. And hope the replacement would be better...
Good that Apple was punished for it. It should happen more often.
I understand that the issue here is the nature of the deal with a specific company, but the EU does not want member states to have too much leeway to cut taxes in any case. They have set minima for corporation tax and VAT, for instance.
Ultimately this is a question of competitive advantage and of ways for small, peripheric countries to survive and prosper. If everything was the same everywhere in the EU, then why would companies pick Ireland?
The US have "domestic tax-heavens" and the country is not falling apart... The EU isn't at risk, either, including because of the huge VAT levels compared to corporation tax.
Effectively, I think this boils down to powerful EU states who want to have high taxes and don't want others to undercut them.
It's odd that the view here, at least among Europeans, seems to be that the higher the taxes the better when the issue is obviously much more complex.
yeah but "negotiate" is not how this is supposed to be, because it creates a non-level playing field. If I planned to move my single-person enterprise to Ireland I should be able to get the same deal as Apple did without having friends in the government.
One can argue that countries should be able to do this, but EU countries have agreed not to do it.
Probably not, because their home country would go after them / make Ireland liable. These kinds of schemes usually work across jurisdictions
[1] https://taxation-customs.ec.europa.eu/taxation/business-taxa...
And if you allow that, what is the point of the European Union?