The Irish government doesn’t want 13 billion euros in unpaid tax from US multinational Apple even though the European Union (EU) has said the firm owes the cash.
In fact the Irish government is so dead set against forcing Apple to pay the tax it would rather spend public money fighting the ruling.
“The state has already spent about one million euros defending the status quo,” Richard Boyd Barrett, People Before Profit member of the Irish parliament, told Socialist Worker. “They are planning to spend even more public money to try and ensure that we don't get the 13 billion euros.
“You couldn't really make this stuff up. Against the background of an enormous crisis in our public services and the second highest level of low pay anywhere in the richer countries you would think any rational government would jump at the chance to get 13 billion euros.”
Richard said the EU ruling had only confirmed what the left in Ireland has said for many years, and which the government had consistently denied.
He argued, “The biggest and most profitable US multinationals based in Ireland have evaded countless billions in tax with the active collusion of the Irish government and tax authorities.
“Some used the so called ‘double Irish’ tax scam to benefit a select number of large multinationals.”
This scam “exploits the different definitions of corporate residency in Ireland and the US”, says the Financial Times newspaper. “Companies exploiting the double Irish put their intellectual property (IP) into an Irish-registered company that is controlled from a tax haven such as Bermuda.
“Ireland considers the company to be tax-resident in Bermuda, while the US considers it to be tax-resident in Ireland. The result is that when royalty payments are sent to the company, they go untaxed—unless or until the money is eventually sent home to the US parent company.”
This and similar tax scams have allowed US multinationals to stash cash totalling one trillion dollars in offshore tax havens.
The Irish government has said it will phase out the double Irish by 2020, but it has simultaneously widened rules allowing multinationals in Ireland to claim tax breaks on IP that they brought onshore
Richard argued, “The level of cover-up of this scandal is really quite extraordinary.
“The Irish establishment—not just the current Fine Gael-led government but also Fianna Fail and the Labour Party—all of them have closed ranks to protect the multinationals consistently over years.”
He added, “In 2013 I put a motion to a special sub-committee on corporate tax that Apple, Google, Facebook and other multinationals believed to be using this tax scam be brought in to be interrogated by that committee.
“Fine Gael, Fianna Fail, Labour and some right wing independents all banded together to vote down that motion and even voted to turn off the cameras so that the debate about the motion would not be seen by the public.”
The EU ruling is being described as a “windfall” by some commentators. But Richard said “it is not a windfall, this is tax that should've been paid. If it is recouped then it should be used for our services”.
“People Before Profit activists are out on the streets demanding that the government doesn't appeal this ruling and starts pursuing the 13 billion. And they are also saying it's not just about Apple, it's also the other multinationals that have benefited from the double Irish tax scam.
“To pursue that money would allow the government to lift the shocking burden of austerity that has been imposed on working class people in Ireland.”
Richard said activists are also mobilising for the next national march against water charges on 17 September. “There's every likelihood that demonstration could be much bigger now in the aftermath of this scam being exposed.”