PenguinAmazon-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.


  1. The Irish tax authorities are challenging the veracity of this report and it is very likely that it will be proven wrong. The media love a good opportunity to knock Apple and the British Press love an opportunity to knock Ireland, as always.

  2. I’m sure this trail of shame doesn’t end with Amazon, Apple or just American companies. The tax lawyers and accountants who come up with these lucrative ploys have every incentive to share them with as many clients as possible.

    Just keep in mind that some of these loopholes aren’t honest mistakes. Politicians of all stripes love to please those who make major campaign contributions. Money means re-election and another ride around on the gravy train.

    Years ago, I read a book about the Rockefellers. The third generation of brothers considered John Rockefeller III a bit odd. In an era when the tax rate on the super-rich was supposed to be 80%, they often reduced theirs to almost zero. John III was the odd son in the family. He instructed his accountants to not let his tax burden drop below 10%. That’s the game that’s going on. High nominal taxes with a lot of anti-rich rhetoric and low real taxes for those with money to move around.

    In the U.S. the Democratic party plays that game most cleverly. For its information-challenged rank and file, it screams “Tax the rich.” At those $20,000 a plate dinners that Obama is now hosting about twice a week, the chief attraction isn’t the food. It’s the reassurance given that all that nasty rhetoric means nothing.

    Apple is unique in this dispute about the Irish-Dutch sandwich in that it may not have stayed within all the complicated legal boundaries. It may have turned committed something that technically illegal. To use loopholes, you’ve got to be careful to clear all the loops properly.

  3. I don’t see any shame in companies paying the lowest tax possible. I don’t see a line of citizens volunteering to pay a dollar more than they have to.
    Happily this kind of corporate driven political corruption doesn’t exist in Britain and Ireland. Dozens of the biggest corporations in the the US pay effective rates of less than 6% because they bank role politicians in both the House and Senate.
    The EU Commission is being used by Frank and Germany to send a warning shot across the Irish bows because they are trying to promote a high tax regime across all of Europe and abhor Ireland’s use of low Corporate Tax as a way of attracting business and jobs to an island on a outskirts of the EU, against the massive advantages that France and Germany have being in the geographical centre of the EU.
    The Irish tax authorities have a long history of adhering to EU rules and it would be a major shock if they were to have breached EU rules in any way. Clearly they have exploited existing rules to the benefit of their country. This is hardly something to be ashamed of considering France has a massive history of completely ignoring EU mandates whenever and wherever it plases.

  4. Ireland has been a real cesspool of neoliberal economics for decades. And look what it’s gotten them After the recent economic collapse, once again, the young of Ireland have been fleeing to find work. Because the Irish government has become not only a tax haven, but a fine example of nearly complete deregulation of financial services (this is also why MNCs find Ireland so appealing). And then once these MNCs accrue multi-bilions in profits they want to put on their books in the US, the US Congres gives them individual exceptions whereby this money can be brought back to the US at a one-time-only super low tax rate on the pile of cash. Ireland has really become the neoliberal economics “sick man of Europe”.Spain and Greece get a lot of the press in this regard, but it is Ireland that is the clearest example of the effects of the “free markets”. imo.

  5. A hilarious piece of nonsense. A highly regulated socialist economic structure has been the hallmark of the Irish economy for decades. It has never been a tax haven, only a low tax regime completely compliant with all international tax agreement. Apart from a couple of individual regulatory errors of judgement Ireland has been the flagship of European excellence since it joined the EU. Clearly your knowledge of the country is non existent.

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