The Apple Ruling Is a Setback for Multinational Tax Dodgers

After a long battle in the courts, Apple has lost a landmark tax case brought against the US tech giant by EU Competition Commissioner Margrethe Vestager. Vestager’s office ordered the world’s biggest company to pay out €13 billion in unpaid tax to the Irish state. The European Court of Justice has now delivered a ruling against Apple.

In a seemingly bizarre turn, the Irish government took Apple’s side in the court battle from start to finish, fighting against the proposal to collect €13 billion that could be invested in public services or housing. In this Jacobin article, first published in 2016, the late Terrence McDonough explained why the Irish authorities were siding with Apple, and how this case fits into the wider landscape of tax dodging by the world’s biggest firms.

Ireland’s economy has had an interesting few months. In July, the Central Statistics Office (CSO) announced that the country’s GDP had surged by 26 percent in 2015. The statistic, widely lampooned in the international press, led Paul Krugman to criticize Ireland for its “leprechaun economics.”

But stranger things were on their way. On August 30, European Union competition commissioner, Margrethe Vestager, delivered a long-awaited decision regarding Irish state aid to multinational giant Apple. It found that the Irish tax commissioners had damaged competition by providing Apple state aid in a sweetheart tax deal.

Apple had paid Ireland’s generously low corporate tax rate of 12.5 percent on its domestic activities and sales. In return, however, Ireland allowed the company to book profits made in other parts of the world to a second company regarded as “stateless” and not required to pay any tax.

The…