Karma eventually catches up with you. And Apple’s past sins — or is it bills? — appear to be on the verge of finally overtaking the company. Finance Ministers from the European Union are backing a finding, which says that Apple has been benefiting from improperly low taxation for over a decade. They are now urging the company to get ready to pay up.
The events took place on the last day of an EU finance minister’s meeting that convened with the aim of hammering out a standard for tax rules for multinational companies. Other topics on the table also included Greece’s critical economic situation and the bailout package planned for it. However, the main focus was upon ensuring that MNCs who had been tax-evading through one way or the other, finally came up with their dues.
Jeroen Dijsselbloem, The Dutch Finance Minister, said
International tax loopholes are a thing of the past. Apple will have to pay back taxes both in the United States and Europe, so get ready to do that.
That is a pretty strong message and coming from Dijsselbloem — who also heads the 19 member group of nations within the EU who use the euro currency — it should not be taken lightly. The EU appears to mean business this time around and a whole bunch of MNCs charged with tax evading, may just have to cough up.
The lists also includes Starbucks and Fiat Chrysler. However, there bill are significantly smaller — a mere 30 million Euros each as compared to Apple’s cheque, which is running into the billions.
Dijsselbloem appeared to have the support of most of his counterparts from other EU countries. Backing up the Union’s stand on the matter, Philip Hammond, Chancellor of the Exchequer of Britain said that proper taxpaying on these corporation’s part was important.
That’s the fair way to do it, and we are going to make sure it happens.
The commission is attempting to bring a complete proposal to the table by fall. The proposal is expected to tighten rules associated with tax payments with regards to multinational companies and may also force the defaulters to come up with back payments and arrears.
The commission was quick to note that this was in no way a message to investors. They are still most welcome on the continent and indeed, were credited with driving growth. Meanwhile, Ireland appears to be the only EU member that has apposed the ruling. This opposition to the general stance may stem from the fact that Ireland’s rules are some of the most welcoming to tech corporations.
While the republic may benefit from the payment derived if the arrears of back payments are cleared, it derives even greater economic advantages from the presence of the MNCs — such as jobs, facilities etc.
Apple and Ireland, Apple’s European headquarters, are both appealing the European Commission ruling. However, the cards appear to be heavily stacked against them. In all likelihood, it may soon turn out to be a question of How much? rather than If?. We will have to wait for the proposal or another statement from EU members to get a clearer insight on the matter. Until then, stay tuned!
A bibliophile and a business enthusiast.