Until the EU tackles tax avoidance, big companies will keep getting away with it | Aidan Regan

Ireland may not have given Apple illegal state aid, but the system still needs to changeWhat happens when a European member state such as Ireland or the Netherlands decides it wants to act like a corporate tax haven? Because taxation is a national sovereignty issue, the European commission can’t directly challenge the corporate tax laws of EU member states. So the commission has instead been trying to use state aid laws to prevent tax avoidance in smaller countries. This bundle of rules is designed to promote market competition and prevent countries giving unfair advantages to companies. In the eyes of the commission, allowing a company to avoid taxes is much like giving it a cash subsidy.In 2016, the European commission found that Apple had transferred around €110bn of sales from their European operations to a head office of two subsidiaries in Ireland. These subsidiaries were registered in Ireland, but were non-resident for tax purposes – so Apple’s profits in Irish accounts weren’t taxed. In a controversial ruling, the commission decided that Ireland had given special treatment to these Apple subsidiaries. In other words, Ireland had actively facilitated the Apple group’s corporate tax avoidance strategies. According to the commission, these tax incentives amounted to illegal state aid, and Apple were ordered to pay the Irish government almost €14bn in unpaid taxes. Continue reading... https://www.theguardian.com/commentisfree/2020/jul/16/eu-tax-avoidance-big-companies-ireland-apple-state-aid #tax_avoidance #apple #ireland #europe #world_news