The iPhone powers growth but not recorded growth Credit - Apple registered traedmark

Ireland has now collected the disputed amount of tax from Apple, as the European Union insisted it should. The next interesting stage is going to be, well, who is going to win on appeal? My betting is that Ireland and Apple will – although my record of prognostication on this subject isn’t all that good. Way back when I didn’t believe that the EU would, seemingly to me at least, breach its own rules about taxation. I think it has here and in that I might be wrong but that’s what drives my opinion anyway. Still, we are where we are:

Ireland collects disputed Apple taxes in full ahead of appeal

It seems a little punitive to me to demand they cough up before an obvious appeal is heard but still, that’s the system:

Ireland’s government has fully recovered more than €14bn (£12.4bn) in disputed taxes and interest from Apple, which it will hold in an escrow fund pending its appeal against a European Union tax ruling.

At least Ireland isn’t going to go spend it while we wait for that result.

Ireland’s finance minister, Paschal Donohoe, confirmed on Tuesday (18 September) that the country had recovered the full amount this month. The company, he said, had deposited the amount in an escrow account, pending a joint appeal by Apple and the country of the ruling, which is expected to be heard this autumn.

Donohoe said that the Irish government “fundamentally disagrees with the commission’s analysis in the Apple state aid decision and is seeking an annulment of that decision in the European courts.”

Also note that Ireland is against that original ruling as well.

At which point, well, which way is that appeal going to go? I would argue that it will be overturned but then a goodly chunk of that is my belief that it ought to be. On the grounds that the original ruling was wrong but then I got that wrong anyway, didn’t I? However, there’s another strand to this.

Vestaeger, the Commissioner in charge here, was quite clear that part of the EU case depended upon the idea that those profits were untaxed anywhere. Not in the countries where the sales were made, not in Ireland and not in Bermuda where the cash went for a rum punch and a tan. They would only have been taxed – and this at 35% – if they had gone onshore into the US. Which Apple didn’t do. It was the entirely untaxed nature which really drove the result.

But the law has now changed in the US. Those Bermuda profits are now taxed. Indeed, Apple has paid past tax upon them too. Thus we’re in a rather different world, those profits are no longer entirely untaxed.

Which should, if we’re all being ruled by the law, make a difference, no? The question being, well, are we under the rule of law or not?

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Spike
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Although in escrow, that €14bn has now been separated from Apple and separated from the process by which it was created. That is, it is now not pre-tax earnings but loot, and the only relevant question for looters everywhere is: Do we want some of it, or don’t we? You are right, last year’s US tax change, dropping US corporate rates in the direction of Ireland and Canada, was accompanied by a one-time tax on offshore caches like this one. That is, the bug in “unitary taxation” in which revenue could be untaxed as long as you keep it somewhere… Read more »