Apple is 'welcome' in the UK if the firm rethinks its European operations post-EU tax debate
Apple is a huge company with the influence to cut a special deal with the Irish government which allowed the giant to pay just 1pc tax on its European profits in 2003 and 0.005pc in 2014.
The EU, against its own rules on allowing each country to make its own tax decisions, has decided to step in and demand a final bill of approximately €19bn (in the region of €6bn more than the amount in unpaid taxes it has been ordered to pay due to interest.)
For many this would seem criminal – the money being demanded in taxes could fund the Irish health service for over a year – but it's clear the Irish government saw greater economic value in having Apple run their European operations in their backyard with all the global interest and jobs it creates.
"The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process," read part of a statement from Apple's chief executive, Tim Cook. The ruling, he said, would have a "profound and harmful effect on investment and job creation in Europe."
With the UK voting to leave the EU – one reason pushed by Leave campaigners being to free itself from such intrusive rulings – the country is now looking to harness new opportunities which include attracting global talent in both individuals and companies. Ireland, who has been the subject of various EU sanctions, including a potential fine over suspending water charges, could see its own 'Irexit' as beneficial or companies such as Apple may look to neighbours for setting up European operations.
“The narrative of the Government has been well set out. Britain is open for business, we welcome any company wishing to invest in Britain and Britain’s workforce," said a Downing Street spokesman when asked if the UK would like to see Apple relocate here.
“You have seen today that Liam Fox has laid out that we have had a record year for inward investment for the year up to May this year which is proof we are one of the most attractive places to do business in – we would welcome any company that is prepared to invest in this country.”
Apple and the Irish government are expected to challenge the EU's ruling. Speaking today, the Minister for Finance, Michael Noonan, TD, said: "The decision leaves me with no choice but to seek Cabinet approval to appeal the decision before the European Courts. This is necessary to defend the integrity of our tax system, to provide tax certainty to business, and to challenge the encroachment of EU state aid rules into the sovereign Member State competence of taxation."
"It is important that we send a strong message that Ireland remains an attractive and stable location of choice for long-term substantive investment. Apple has been in Ireland since the 1980s and employs thousands of people in Cork. The company has continued to expand its operations in Ireland in recent times.”
The EU must be confident in the ruling and that it would be upheld in court, or it will be an embarrassing situation for the Commission during a time when its meddling in sovereign affairs is being questioned across Europe.
Outspoken boss of RyanAir, Michael O'Leary, weighed in on the debate and said: "Frankly the Irish government should turn around – they shouldn't even appeal the decision – they should just write a letter to Europe and tell them politely to f**k off."
For now, Ireland remains attractive for companies seeking to expand their operations. Fitbit announced today that it had opened its European headquarters in Dublin following significant growth across the continent; with revenue rising 150 percent year on year in the second quarter of the year.
“We’ve seen Dublin become a strategic hub for the technology industry as a centre for innovation and sourcing top talent in the region, and we look forward to building a strong team here to complement our offices around the world,” said Fitbit CEO and Co-Founder, James Park.
Hopefully, companies setting up in Ireland now are just as enthusiastic in a couple of years time.
What are your thoughts on the Apple tax debate? Let us know in the comments.
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