Ireland can use unwanted taxes to keep Apple sweet

Bitter sweet. Big Tech taxes are not Apple of Ireland’s eye. That is message Dublin sent when it sided with iPhone maker in a European Union dispute over 13 billion euros in corporate levies. On Tuesday, Europe’s top court ordered Tim Cook’s company to pay funds. Prime Minister Simon Harris can use unwanted money to improve infrastructure big companies crave.

saga over Apple ’s Irish tax affairs dates back to 2016. After a lengthy legal back-and-forth, European Court of Justice sided with European Commission’s argument that U.S. company paid too little taxes and ordered it to repay funds into Dublin’s coffers.

Ireland feared that accepting Apple ’s back taxes would scare away its corporate golden geese. country attracts large multinationals like Pfizer, Facebook owner Meta Platforms and Salesforce with its 12.5% corporate tax rate. Paroxically, tax take from foreign companies has put Dublin in enviable position of having a budget surplus. Last year it amounted to 8.3 billion euros and it is likely to stay around that level in 2024.

But Ireland’s days as a corporate tax haven are alrey numbered. country reluctantly signed up to an OECD tax treaty in 2021 which set corporation tax at a minimum of 15%. In ory, higher levies might prompt Apple & co. to move to Paris, Amsterdam or Mrid. But those countries, and indeed most EU members, have higher corporate tax rates. Bulgaria and Hungary, which charge companies even less than Ireland, don’t look like likely alternatives.

So Harris has some time to persue Big Tech and Big Pharma to stay put. He could spend Apple ’s taxes to increase Ireland’s attractiveness, even with a slightly tougher fiscal regime.

Dublin is in throes of a dece-long housing crisis. In May, a survey by Dublin Chamber revealed that two out of every three local businesses believe housing shortages impacted ir ability to recruit staff. lack of housing has increased rents by 60% since 2015, compared to 13% across euro area, according to Eurostat. Transport is anor weak area. Dublin is one of few major cities in Europe without an underground train service and government’s plan to build one has been delayed until 2035.

Ireland will have to handle its unwanted cash injection with care. But if it spruces up its infrastructure it may be able to keep Apple and or companies from going sour on country.

Context News

Apple on Sept.10 lost its fight against an order by European Union competition regulators to pay 13 billion euros ($14.4 billion) in back taxes to Ireland. ruling by European Court of Justice is a landmark decision in EU’s crackdown against sweeart fiscal deals between member states and multinationals. European Commission issued order in 2016, saying that iPhone maker benefited from two Irish tax rulings for over two deces that artificially reduced its tax burden to as low as 0.005% in 2014. Apple h said Commission’s decision defied reality and common sense. Ireland, whose low tax rates have helped to attract Big Tech to set up ir European hequarters, h also challenged EU ruling. After ECJ’s ruling, Apple said: " European Commission is trying to retroactively change rules and ignore that, as required by international tax law, our income was alrey subject to taxes in U.S." decision is final and cannot be appealed.