Amazon-haters who used the media/retail giant’s European tax policies as a stick to beat it with may soon be looking for a new theme: at least if they want to continue to cast Amazon as the sole villain in the piece. Because the European Commission has issued a letter asserting that the Irish state gave tax-related state aid to Apple to support its operations there, in contravention of European Union law. According to reports in the BBC and elsewhere, Apple is enjoying a 2 percent tax rate on many of its European activities by declaring them through its Irish subsidiary.
According to the European Commission letter, “any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the provision of certain goods shall be incompatible with the common market, in so far as it affects trade between Member States.”
The specific allegations concern Irish tax rulings on behalf of Apple in 1991 and again in 2007 where Ireland gave inappropriate consideration to employment factors. Apple and Ireland both deny the allegations.
Admittedly, the EC investigation is into wider tax practices by MNCs in the EU and could ensnare Amazon too. However, Apple is very visibly being fingered first. And it will be interesting to see if popular press reporting of the case reaches the same fever pitch of denunciation as previously with Amazon.