The Apple Tax is about a lot more than just Apple and the billions of euros in backdated corporation tax it purportedly owes to European governments. It even goes far beyond the question of how — and how much — central authorities should tax recalcitrant multinationals that make billions of dollars in profits on their turf but share few or none of the proceeds.
What is most at stake is the question of who gets to set the fiscal rules in Europe’s foreseeable future. One thing is clear: if Brussels gets its way, it’s not going to be the national government of each member state. And that could be very bad news, at a very bad time, for a number of European economies, in particular Ireland, Luxembourg, and the Netherlands.
The EU’s Competition Commission slapped Apple with a €13 billion retroactive tax bill. That money is apparently owed to the government of Ireland, its decades-long partner in one of the biggest tax-avoidance schemes of living memory. The Commission argues that the arrangement cooked up between Irish authorities and Apple’s tax lawyers and accountants represented illegal state aid, enabling the U.S. company to get away with paying an effective taxation rate on its European profits as low as 0.005%.
Naturally, Apple does not want to pay the money. Apple’s chief executive, Tim Cook, even went so far as to call the EU ruling as “total political crap”:
They just picked a number from I don’t know where. In the year that the commission says we paid that tax figure, we actually paid $400 million. We believe that makes us the highest taxpayer in Ireland that year.
The government of Ireland doesn’t want the money either, despite the fact that it could certainly do with it: at 128% of GDP, it boasts one of the highest levels of …