The shockwaves from yesterday’s massive announcement that Apple must pay 13 billion euros ($14.52 billion) in back taxes in Europe are still rippling — but nowhere are they being felt more keenly than in Ireland.
Although the Irish government wasted no time in saying it planned to appeal the EC decision, a new report notes that internal disagreements on this issue could have the potential to have an enormous impact. Like, tearing-the-government-apart enormous!
The reason for this is that the minority party to which Ireland’s pro-Apple finance minister, Michael Noonan, belongs must have the support of a number of independent lawmaker to appeal the decision.
As Reuters notes, if this group of independent lawmakers refuse “to back an appeal and pulled out of government, [ruling party] Fine Gael would no longer have sufficient support in parliament to pass legislation and the government could collapse.”
It’s just one of many potential problems which could occur as the impact of yesterday’s verdict continues to be felt. Already, a post-Brexit U.K. has said it would happily welcome Apple if the company decides to set up shop there. Technology companies in Silicon Valley, meanwhile, have expressed concern at the possibility that taxes can be applied to them retroactively.
Whichever side of the fence you come down on, one thing that’s for sure is that the ramifications of this week’s verdict will be felt for a long, long time.
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
6 responses to “Apple’s giant tax bill has potential to bring down the Irish government”
Seriously I don’t understand why Apple fans are lining up in support of the company. Apple has basically freeloaded of everyone for long enough, including the American taxpayer. There is absolutely no doubt in my mind that Apple should pay its full share of tax. This pays for education, our roads and the infrastructure that helps make the research, development and distribution of these products so essential. This virtually 0% tax rate is unbelievable. For a company that already has absolutely enormous cash reserves into the billions such an attitude in really not excusable.
Dont frame this into a debate of America vs Europe. This is NOT that at all. Companies much accept social responsibility and be willing to contribute into society as a whole – just as every single one of us do. We are all in this together!
Not so much as “support” for Apple as it is disgust at the EU.
If they can do this to an Apple, they can do it to anyone. That I recall the EU did not exist when Apple set up shop in Ireland.
If a company has an agreement and it pays what is is asked to pay… and 40 years later a “new” partner in your corporation suddenly decides that you should pay more… and then ask you to pay retroactively for the last 40+ years? Really? Wouldn’t the new partner request a new deal? If the new partner asks to get paid a fair share FROM NOW ON, maybe… but RETROACTIVELY? What?
As a business, if I had known that you were to bill me an extra 10 or 15% that I did not have in my original budget I would’ve closed shop and moved somewhere else, looked for another country to build my factory. But if you NEVER gave me a chance to consider it.
How would it feel if it was your tenant, asking you to pay a new higher rent retroactively to what he/she considers is fair in 2016?
Even at the consumer level, if the power company did not bill me the correct amount for 5 years and suddenly shows up with a retroactive amount of thousands, I bet you, you should not pay the full amount, not your fault. And it did happen to me, they screwed up the billing for 5 years, billed me for the past 5 years on one bill… called a lawyer, paid 1/30th of what they claimed. Not my fault.
I could see hundreds of companies closing shop in any country from the EU in the next 10 years.
Let’s face it, the EU considers everyone is doing everything wrong but themselves.
Actually setting up shop in the UK might help stablize the (post-Brexit vote) world ecomony. Might encourage the sentiment that the the UK economy is not collapsing.
Even this 14 billion is only tax at or around 8-12 % if they were headquartered in the USA it would be 35%, most european countries corperate tax is 25% but i think its also lower in holland to attract imports into rotterdam
If ireland taxed all the large multinationals based in ireland at the low tax rate of 12.5% which it is supposed to apply anyway it would pay off its 150 billion bank debt in a few years and not have to cannabalise the public services. remember apple are not the only ones at it this is just the tip of the iceberg. Intel, twitter, Facebook, Google, and all the Big Pharma companies
The simple economic fact is that Apple — indeed, all for-profit companies — does not and never will suffer a tax burden. They will employ an army of financial wizards who will project what their tax bill will be at the end of each tax period, and then Apple will spread that projected cost across all the devices they expect to sell during the same period. So while Apple may in fact be writing the check to whichever government is pointing the enforcement gun at them, they are first collecting the money from you and me, the consumers of their products. We are the ones paying Apple’s — and every company’s — corporate income tax.
The only entity that is allowed to take something from someone else with the threat of weaponized enforcement is the government. So here we have a private, global company doing business according to laws written by a sovereign nation, and paying more tax dollars globally than any other company on the planet. Years after they and the sovereign nation have believed everything was being done according to those rules, an outside agency steps in and says the rules were not written properly, that new, different rules should have been in place all along, and that now everyone must retroactively comply… and that as a result, Apple must now pay over $14 billion in “back taxes and penalties” – taxes that were not due or delinquent under the rules by which everyone was playing at the time.
Apple needs to win this battle, because the final decision will set a precedent that governments can change the rules, or that the government is by the consent of the governed.