Apple Must Pay Billions for Tax Breaks in Ireland, EU Orders

Countries go to great lengths to attract jobs to their shores, and companies do the same to avoid taxes. The European Commission has ordered Apple, the world’s largest company in terms of market value, to pay €13 billion in back taxes and argues that Ireland’s tax incentives extend an unfair advantage. Apple assigned profits of Irish subsidiaries to a “head office” to reduce taxes, report James Kanter and Mark Scott for the New York Times. The US has taken steps in recent years to curtail tax inversions, US firms relocating headquarters in pursuit of low taxes, and the commission ruled that Apple’s tax bill could be reduced if the firm paid more US taxes. The article describes a contradictory US response: “American officials have warned that the commission is overstepping its power given that taxes are typically left to national governments to oversee and that European officials should not retroactively issue penalties in past tax rulings,” yet “They also emphasized that such cases undermine continuing efforts to overhaul global policies and create measures to curtail tax avoidance.” The European Commission is investigating other multinationals. – YaleGlobal