The Myths Behind Apple’s Manufactured Tax Crisis

The first myth is that of the supranational tax bully. In this tale, the commission has abandoned the rule of law. It has encroached on member state tax matters — which, under EU treaties, are generally the purview of member states alone — by substituting its tax judgment for that of the competent tax authority. As the US Treasury wrote the day before the decision to require Ireland to impose a €13bn back tax bill on Apple was announced: “This . . . approach appears to expand the role of the [competition directorate] . . . into that of a supranational tax authority.” This tale is raw meat to protectionist US legislators. But it is false. The heart of the case is simply that Ireland gave Apple hidden subsidies in exchange for jobs. The only tax connection is that Ireland harnessed its tax system as the instrument to deliver these subsidies. (FT)

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