The ruling by the European Commission to force Apple to pay €13 billion in back taxes is a sign that Ireland’s corporate tax model may not be sustainable for much longer. Public and political opinion across Europe is moving towards greater transparency around tax arrangements for global corporations.
This has been fuelled by the sheer nature and scale of corporate tax avoidance that has come to light, from Luxleaks to the Panama Papers, which shows that, for tax purposes, many multinationals have become a power unto themselves. Depriving citizens and taxpayers of scarce funding to maintain decent public services and undermining the public’s faith in our institutions and laws.
That is why I welcomed, and was the only Irish MEP to vote in favour of, the European Parliament report prepared by the special committee on tax rulings. This report included a raft of recommendations for fairer and more transparent corporate taxation. MEPs supporting these measures want to ensure payment of tax owed where profits are made, that double non-taxation loopholes are plugged, and that intra-company loans are not made to evade taxation.
These and other measures are not an attack on individual countries or companies. Instead they constitute a common denominator to establish a modicum of effectiveness and decency to our tax regimes – in an era where a purely national approach leaves us powerless against the forces of globalisation.
Rejecting these new measures out of hand, reveal a misguided sense of tribalism by those who want us to believe their own interests are the same as the country’s interest. They’ll jump to invoke sovereignty when these matters arise, but are we really sovereign when we daren’t challenge the power of multinationals?
I believe that a corporate tax regime that fails to claim a minimally fair amount of revenue from large corporations, robs the fundamental workings of government of legitimacy. Instead I would urge a far-sighted, fair and ambitious policy to attract inward investment in Ireland.