Apple Inc & the Irish government are finally being held accountable by the European Commission for their blatant tax evasion racket. In a landmark decision, the European Union regulator threw the book at Apple. Allegedly Apple & the Irish government worked together to manipulate fiscal loopholes to avoid paying taxes. It’s incredible that the world’s richest company can be this stingy. Whether they will finally be held accountable for their actions remains to be seen. Apple & the Irish government vowed to fight the decision tooth & nail. Apparently they feel that they are too big to play by the rules.
Apple Caught Up In a Whirlwind of Corruption
During the last 3 years, the European Commission has done a valiant job at cracking down on corporate tax evasion. Once they began this crusade, it became apparent that the problem was much bigger than anyone could imagine. Pretty much every major corporation was using money storing loopholes with governments that were complacent with their crimes. In January the commission ordered Belgium to retrieve the 700 million euros that they illegally gave as tax breaks to 35 major companies. Some of the most well known players of this racket were Anheuser-Busch InBev NV & BP Plc. Even Starbucks got caught red handed, they were ordered to pay 30 million in back taxes to the Dutch government. Unfortunately the corruption didn’t stop there. The EU has also launched state-aid investigations targeting Luxembourg’s shady tax agreements with Amazon.com Inc & McDonald’s Corp.
Even though these tax evasions are shocking, Apple’s blatant disregard for the law takes the cake. At a staggering 13 billion euros, this is the biggest corporate tax evasion case in history. These gargantuan figures stem from the European competition authorities findings in 2014. There they discovered that Apple’s tax arrangements were unfairly designed to give them a huge tax break in return for creating jobs in Ireland. Apparently Ireland gave Apple two extremely enticing tax rulings that prompted them to allocate almost all of its sales profits to a head office that only existed on paper. According to investigators, the head office “has no emplyees, it has no premises, & it has no real activities”. To make matters even worse, “The head office was subject to no tax in Ireland or elsewhere”. All this is coming from a company who has $235 billion in cash. Out of this massive cache of funds, over $214 billion is being held overseas to avoid taxes. This outrageous disregard for the law is exactly why these crack downs need to happen.
The reason why Ireland is opposing this new wave of transparency is the fact that their economy depends on corporate tax evasion. Apparently low corporate taxes are the cornerstone of the Irish economic policy. Their 12.5% rate is officially the lowest in Western Europe. These lenient numbers have drawn over 700 U.S. companies to have units there. This massive flow of barely taxed cash employs over 140,000 people. Apple alone employs 6,000 people in Ireland & generates an estimated $4.45 billion a month internationally. Think of all the good that money could do if it was taxed.
The house of cards of corporate greed is finally starting to fall. Holding these massive corporations accountable is the only way to keeping them from sucking the world dry. The news of their nefarious dealings are already creating shockwaves throughout the stock market. Apple’s shares fell a whopping 0.7% in Germany, leaving it at 94.72 euros a share. Hopefully this trend continues & we are able to put a stop to this blatant corruption.