It was win-win for Ireland. They got Apple investment and jobs for years, at the expense of other states, then “lose” a court case and get a tax windfall.
Some companies might leave but they are not better off elsewhere in the EU so I think most will stay.
Exactly what I thought — would be crazy if this was some 5D-chess move from the government after all, but not completely unlikely...
By this logic the other countries should do the same thing and offer them sweetheart deals in the hopes that the EU will cancel the deal ex post facto and give them the money anyway.
Meanwhile the companies would then have the incentive to take countermeasures, e.g. make it so the EU entity has no assets and would then have no money to pay retroactive taxes and file for bankruptcy if they get rug pulled like this again, or just pull out of the EU and sell there through third party distributors that have razor thin local margins.
Retroactive court decisions like this set up perverse incentives.
I wonder how long this tax revenue will last, I realize this is a one time lump sum, now that the tax advantage for "locating" in Ireland no longer exists.
> The windfall is being banked in two tranches – €8bn this year and the remaining €6.1bn next year – giving the country’s finance department a projected €105bn in tax revenue for 2024.
So this is about 7.6% of their tax revenue for this year and 5.8% of their revenue next year. If AAPL does leave that's a massive loss for the country.
> Combined with the one-off revenue from Apple, the expected corporate tax intake for Ireland is €38bn, half of which comes from the top 10 companies, including the tech companies Microsoft and Intel, and pharma multinationals, such as Pfizer.
Ireland could be facing a massive corporate tax loss if these companies just all up and go to a new European country.
Possible destinations are Luxembourg(Amazon, Fiat Chrylser) and the Netherlands (starbucks)
> If AAPL does leave that's a massive loss for the country.
Is it, though? AAPL didn‘t pay those taxes before, that‘s exactly the underlying problem, no?
Ireland would lose something for sure, as the operations of AAPL certainly created some kind of money for the country — but not taxes.
Before the ruling Apple was paying about 8B in taxes per year to Ireland.
If multinational corporations are no longer able to do a Double-Irish Dutch Sandwich anymore, it doesn't make sense to stay there.
Which means the future losses in a single year from several large multinational corporations leaving will be larger than this one payment.
>Before the ruling Apple was paying about 8B in taxes per year to Ireland.
> If multinational corporations are no longer able to do a Double-Irish Dutch Sandwich anymore, it doesn't make sense to stay there.
That figure isn't going to change, nor are companies going to be running out of Ireland - the tax strategy has been shut down for more than a decade. Ireland has other features which make it attractive to US businesses, including strong historical ties and being the remaining English speaking member of the EU.
Malta is the other EU state with English as an official/national language.
Double Irish with a Dutch Sandwich has been dead and replaced several times over for years.
Not only tax loss but also GDP loss.
https://www.politico.eu/article/ireland-gdp-growth-multinati...
Ireland, like Luxembourg, Singapore, Switzerland and other tax havens have “ghost GDP” - GDP that exists purely because of economic activity recorded as occurring in Ireland due to tax offshoring, but doesn’t actually exist (the economic activity happened in another country, and the money doesn’t end stay in Ireland).
I’ve seen a few attempts at estimating the size and it’s up to 40% of Ireland’s GDP.
If that tax advantage disappears one would expect multinationals to rearrange their affairs and we should see a rapid decrease in Ireland’s GDP over the next few years.
Aren't Luxembourg and Netherlands also in the EU?
Wouldn't the same rules apply?
The issue is that the rule is highly subjective. So now there is a ruling for how not to structure your tax laws and they'll set out to achieve the same goal in a different way, i.e. they'll be more subtle about it in the future.
It’s a clear headed decision. Every euro of it needs to be spent on infrastructure. We can’t fix the shit weather but we can try to bring the country up to modern standards.
IMO, fears of companies leaving are unfounded. We’re still the only native English speaking country in the EU and from a business sense, our culture most closely matches that of the US. The Irish government knows where the bread is buttered. There will always be attractive incentives for multinationals to be HQd here.