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Apple ruling strong case for transparency in tax arrangements of multinationals

CA Ireland magazine spring-summer 2015

In August, the European Commission ruled that Apple owes approximately €13 billion in back taxes to Ireland, accusing the company of having benefitted illegally from state-aid to enable Apple to avoid paying the proper tax for more than a decade.

The Apple ruling was in many ways, vindication of what Christian Aid has been saying for many years:

  • That technically legal, doesn’t mean morally acceptable. Many people have argued that the arrangement s that Ireland and Apple came to were at the time legal. This may or may not be true, but either way, it does not take away from the fact that paying so little tax on such vast sums, is an moral issue, with real consequences for people and societies.

  • That Irish tax policy impacts negatively on the ability of poor countries to generate tax. From what we understand from the various announcements, revenue generated in African countries was funnelled through an Apple company in Ireland thereby depriving countries of much needed revenue. 

  • That financial secrecy around the activities of multinational allows some companies get away with paying far less tax than they should. That is quite apparent from what we know already, and raises the question as to whether there are other companies enjoying similar, if not identical arrangements, and gets to the heart of our calls to lift the veil of secrecy from the activities of multinationals.

  • And that public reporting on the full spectrum of a company’s activities in each of the countries in which they operate- something that we have long argued for- would many years ago have publicly highlighted that fact Apple was shifting vast sums of revenue into Ireland from countries in Africa, Middle East, and Europe, and paying little or no tax on that money. 

The inevitable decision to appeal the ruling did not come without a silver lining though, and Christian Aid played a very important role in ensuring that the agreements reached as part of the Irish Cabinet’s decision to appeal contained some important elements of tax justice.

One of the most important agreements was that a high level conference on international tax is to be held before the end of the year. The conference is to include representatives from multinationals, government, academics, tax experts, and civil society.

It is expected that Christian Aid will have a prominent role in shaping and influencing the shape of this conference. This will be a golden opportunity to ensure that the concerns of the people with whom we work for tax justice around the world, will be represented and to push Ireland for a more sustainable human rights focussed tax policy.

Sorley McCaughey, Head of Advocacy & Policy

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