EU tax ruling on Apple in Ireland puts focus back on taxation of MNCs

THERE has been jubilation among free marketeers over the ruling that the European Commission (EC) - the competition watchdog of the European Union (EU) - had failed to prove that US tech giant Apple had been granted special economic advantage and, by extension, state aid to the tune of 13 billion euros (S$20.7 billion) from Ireland.

The ruling by the EU's second highest court, the General Court, goes back to 2016, when the EC had ordered Apple to pay the sum for underpayment of taxes on profits across the EU from 2003 to 2014. It was claimed that Apple had used two shell companies incorporated in Ireland to reduce its tax burden to a fraction of 1 per cent.

The American corporate tax lobby sees the court's ruling as a victory against Euro-protectionism. The EC's charges against Apple and Ireland and another case against Google were viewed as a broad EU attack on US tech giants because the Europeans, allegedly unable to compete, sought to hobble those companies dominating their technological landscapes. Further, it was alleged, the EC's move was part of the EU's offensive against its smaller member states that dangle low tax rates to attract multinational corporations (MNCs) to their shores - which runs counter to the interests of high-tax members such as France and Germany.