Why? Sure, Ireland would get a one-off tax boost, but then all the firms that had structured their business this way would no longer have a reason to invest in Ireland at all.
I'm Irish and the ruling relates to the double-irish tax break specifically, it's about marketing for this tax evasion tactic. It's a hot topic in Ireland; Ireland looks like one of the richest countries on Earth (by GDP) but most Irish aren't feeling this. It's the huge amounts of money flowing through this double-irish loophole that creates the false GDP number. The loophole should end and paying the tax means closing the loophole.
I'm also Irish and you need to think of this more than just the GDP number. Tens of thousands of Irish people are working in the tech and pharma sector which is directly related to the tax status that companies have here. It's convenient for a company to have its "tax HQ" as well as a large physical presence in the country. It is allowing us to build our own sovereign wealth fund.
The Ireland of today is hugely better off than it was in the 80s and early 90s, and a good deal of that progress has been smart "marketing", as you call it, bringing in investment. Without this, the economy of Ireland would be closer to Greece or Portugal today.
I would also add that Ireland's corporation tax receipts, particularly from MNCs, are very significant, so the benefits aren't imaginary in any sense. The government has largely squandered those benefits but that's a different matter.
Fair points, and I agree. However, I believe that the double-irish loophole is more of a 'value add' for the big companies already here, to lessen their tax load in other countries via 'convenient' accounting. The EU ruling is more about this tax evasive nature/use of the loophole than the investment in Ireland and it's economy & jobs.
Edit: The EU ruling actually targets a specific use of this loophole by Apple, which alleges amounts to state aid, hence the anti-trust comments. (Gotta love the HN community for delving into the details)
The governments stance is that any company could have applied the same tax rules if they wished, so it was not state aid. As a side note, the "irish double sandwich" rules have changed since this
The disagreement is between the European Commission and the Irish government. The deciding authority here will be the European Court of Justice, after appeal from the decision of the General Court - which favored Ireland.
Honestly at this point, they're probably not going to up sticks. Well-educated Anglophone workforce, lots of existing employees and infrastructure, excellent rule-of-law, lots of extant US-Irish good will, unlikely to elect popularist strongmen any time soon ... where else to go?
As a Dubliner, I can tell you that very few are feeling positive effects of these ‘billions of euros.’ The EU ruling is more about a tax evasion loop hole that sees vast billions of euros passing through it, then investment of billions in any part of the economy.
It is part of the "deal" for companies in Ireland to get access to the rest of the EU. This access is the reason why Apple etc shuffle their profits through Ireland in the first place.
The "it" in this case is that every company should be treated the same. So basically no sweetheart deals allowed. And now there is a fight in the courts if there is/was a special deal in place for Apple or not.
It's not weird, Ireland is part of the single market, that allows Apple to operate in the single market area from Ireland but the counter part is that there are a set of rules to avoid a race to the bottom in term of taxation. That's what this is about.
How much taxes will be paid in the EU when the giants leave? Ireland is making a judgement here, one where they understand that they have more to gain this way. That is: unless you are trying to make the claim that they have been bribed by Apple.
I don't think many megacorps are going to willingly abandon a fifth of the world's GDP and an even larger portion of the world's disposable income. They aren't going to leave that much money on the table.
Taxing multinational companies is a prisoner's dilemma, and taxation agreements between countries are a rational strategy to get a better outcome for all.
> taxation agreements between countries are a rational strategy to get a better outcome for all
That may be the theory, but the reality is that they are bully pulpits whereby the largest nations (in this case Germany and France) force the others into having to act against their own interest.
What may be beneficial for Ireland, is certainly not beneficial for the other nations in the EU. I don't see why it's bulllying, when Germany or France try to enforce the treaties they have with Ireland (as an EU member).
Depends on the example. The US treaties with indigenous peoples don't really seem to be bound to anything other than the ink on paper. So, what's your point?
First of all, Montana enjoys 10th Amendment dual-sovereignty, just like every other US state.
But second, you seem to be asserting that the other involved sovereigns have no right to hold Ireland to the commitments it agreed to when it signed treaties. How is that supposed to work? Are treaties now just lies of convenience?
The European Union isn’t sovereign. It likes to pretend it is, but it isn’t.
> Are treaties now just lies of convenience?
They’ve just about always been just lies of convenience. Think Molotv-Ribbentrop pact. Or the START treaty. Or the Iranian nuclear deal. Or the Treaty on Conventional Armed Forces in Europe, which is dead as of yesterday, because NATO suspended it too.
> The European Union isn’t sovereign. It likes to pretend it is, but it isn’t.
I'm going to assume you're misinterpreting rather than trying to be disingenuous, but I was obviously referencing the nations Ireland signed the series of treaties starting with the Treaty of Lisbon (which Ireland signed in 2009).
France, Germany, etc. are perfectly within their rights to hold Ireland to the agreements it made.
> They’ve just about always been just lies of convenience.
Your examples are proving the opposite of what you appear to think they do. The US would be a much better example of what you mean, but that just demonstrates that nobody currently wants to take the US on.
In any case, Ireland is perfectly free to exit the treaty normally if it chooses. England showed them how.
Performing better than the other two major European economies, France and Germany?
Britain doesn’t seem to be an outlier considering a backdrop of an ailing European economy suffering the after effects of the energy crisis - though clearly it could be doing far better in the global context.
The original ruling was that Ireland did not give state aid to Apple, that any multinational could have applied the same rules. This was not accepted by the Commission, they asked for a higher court to rule.
After several years it has now been suggested that the higher court puts aside its judgement and that it goes back to the lower court, because apparently (according to the Advocate General) the lower court did not take into account several factors and had errors in its judgement (relating to Intellectual property rights, where tax should be paid e.g. in the country of sales or in the country of registration). Which seems to make it once again an issue on tax and not on sweetheart deals.
I'm not well versed on EU rules relating to the case; do you know if it's possible that this could 'ping pong' between the two courts or is there a mechanism for a final decision on the matter?
That is the allegation, which Ireland disputes and the General Court dismissed.
I'm well aware that the EU has no authority on direct tax matters, which is exactly why Ireland feels aggrieved, as the Commission is effectively using state aid law as a vehicle to circumvent the limitations on the EU's powers.
> I'm well aware that the EU has no authority on direct tax matters, which is exactly why Ireland feels aggrieved, as the Commission is effectively using state aid law as a vehicle to circumvent the limitations on the EU's powers.
as someone who generally dislikes the EU... this one seems fair?
giving Apple a custom tax rate to encourage Apple to set up in Ireland seems exactly what state aid rules were designed to stop
