Newspapers divide over the lessons of the £11bn Apple tax demand – The Guardian

Does the European commission’s demand that Apple pay a record-breaking £11bn in back taxes to Ireland reflect well on the European Union?

Does it justify the British people having opted for Brexit because of the EU’s high-handedness? Or does it suggest that Britain has decided to quit the EU at the very moment it has shown its teeth by bringing a giant corporation to heel?

Although national newspapers had different answers to those questions, they did appear united in their belief that Apple itself was in the wrong. Struggling old media was delighted with the opportunity to sink its teeth into digital media.

The Times thundered: “Apple’s founder, the late Steve Jobs, once said that individuals are basically ‘noble and honourable’. The same cannot be said of Apple’s tax arrangements.”

Both the Sun and the Daily Mirror believed the deal between Apple and the Irish state was “rotten to the core.”

The Sun thought it “about time Apple was hit with a monster tax bill” because . “they and other web giants have got away with murder when it comes to paying their dues.”

In the Daily Mail, its business commentator, Alex Brummer, remarked on the “corporate arrogance, tax avoidance and cultish secrecy of Apple” and derided governments for giving “Apple and other digital giants a free pass to trample over the tax codes of countries where it makes hundreds of millions in profits.”

The Independent scorned “the behemoths of technology” – the Apples, Amazons and Googles – for depriving governments of hundreds of billions in tax revenues.

But there was no such unity about the EU. The pro-remain Mirror viewed the tax ruling as “a huge prize for the European Union.” It said: “We congratulate the European commission for fining the bad Apple but there are more companies spoiling this particular barrel.”

No so the Brexit-supporting Telegraph. It viewed the commission’s decision as an interference in the free market, an example of the EU failing to demonstrate a “commitment to economic openness.” It continued:

“The European commission’s dealings with Apple and Ireland are a textbook example of what is wrong with the EU, both economically and politically.

Economically, a punitive approach to the taxation of highly mobile international corporations is an act of self-harm: such firms can and will relocate to countries that do not seek to milk them for every penny of tax they can.

Politically, it is an affront to democracy that the unelected commission in Brussels should presume to dictate to Ireland’s government what taxes it should levy.”

The Telegraph sees Brexit as a chance to do as Ireland has done by striking deals with corporations and other non-EU economies.

A news story in the fanatically pro-leave Daily Express, headlined “Apple’s £11bn tax levy ‘will benefit UK after Brexit’”, quoted “experts” who claimed that an EU-free Britain could attract companies bu forging tax deals, “unfettered by Brussels anti-trust rulings.”

The Times, which came out in favour of remain ahead of the EU referendum, was scathing about Apple’s tax deal with the Irish authorities. It must pay what it owes, said the paper, and “Ireland must tighten its rules.”

It had little time for the argument that Apple created jobs in lieu of paying tax. Elected governments should worry about jobs, not “technology executives”.

Conceding that “it will always be difficult to devise a system without loopholes”, the Times urged developed countries to co-operate and companies to “play fair” so that governments can “take more of what they are owed.’

Brummer’s commentary in the Brexit-supporting Mail was interesting because he praised the EU for its “most significant drive… to make multinational companies engaged in complex tax avoidance play fair.” He wrote:

“All this is surprising because generally the EU is a sclerotic and slow-moving organisation. But now the arm that deals with corporate competition has showed itself to have real teeth…

The take-no-prisoners intervention of the EU also offers a great contrast to the softly, softly approach of former chancellor George Osborne and Her Majesty’s Revenue and Customs (HMRC) in their efforts to make Google, Amazon, Starbucks and others pay their fair share of taxes.”

He thought Apple had previously benefitted from a “soft ride” in Europe but regarded “this economic howitzer launched at Apple” as “a huge step towards a fairer global tax system.”

In essence, the Mail’s Brummer was in unusual accord with the Guardian. Its editorial, “Apple, pay your way”, also saw the EU decision as a positive step.

Unlike the Telegraph, it argued that Apple’s tax avoidance “offers the voters of Brexit Britain a grim warning of the ever more dysfunctional capitalism being urged on their government by the free-market fundamentalists around the cabinet table and the lobbyists for investment banks and big business.”

After examining Apple’s global activities, it pointed to the company’s creation of a “paper” head office in Ireland where “profits allocated to it went untaxed” and called it “a version of globalisation taken to its deformed, absurd limit.”

As for Apple’s plea about providing jobs in Ireland, the Guardian remarked:

“When Apple said yesterday that next to no research work was carried out in its European headquarters of Cork, it was both preparing for a legal appeal and giving the game away about the quality of jobs it has actually created in Ireland.”

And it concluded: “The lessons here for Brexit Britain are unignorable. For a long time, the City of London has functioned as a tax haven… As she maps out the UK’s future outside the EU at Chequers today, Theresa May is under ever more pressure to go further down that route – to turn all of Britain into some lighttouch special enterprise zone, with favours for industries making extravagant promises.

“The lesson of Apple in Ireland is that such promises are never as good as they seem.”

The Independent was also worried by “huge and powerful corporations” that “overwhelm small and feeble nation states” in an environment where “‘intellectual rights’” can be relocated on a keyboard stroke.”

It said: “Such was all too obviously the case with Ireland, virtually bankrupted by the global financial crisis – and Apple, the world’s richest company by some measures.”

So “thanks to the European commission, which receives little gratitude whatever it does, Europe’s citizens have discovered the full scale of this abuse.”

It contended that “the EU, by dint of its sheer size as marketplace, has the stature to stand up to the likes of Apple” and continued:

“It is painful to think what position HM Treasury will be in in these sorts of scraps, post-Brexit. It could follow the Irish example and leave these enterprises virtually untaxed in return for locating jobs in Britain; in which case our European neighbours would be entitled to object to unfair ‘tax competition’ on such a scale.

They might well retaliate by restricting access to the single market still further. We would all be the losers then, except of course for global corporations like Apple, which would find no difficulty in exploiting these arguments to their best advantage.”

The Irish Times saw it somewhat differently: “Ireland has always presented itself as having a tax system with a clear legal underpinning, offering certainty to companies.

“Rightly or wrongly the judgment casts doubt over the way we taxed at least one major corporation – and this carries with it reputational damage for Ireland.” It said:

“The damning verdict by the commission on how tax was applied in the Apple case leaves the [Irish] government with little option but to lodge an appeal, given the central importance of foreign direct investment to our economy…

The Irish side is insistent that the commission has erred legally, as is Apple. Ireland will also claim an infringement on our tax sovereignty.”

But, like UK newspapers, it understood that “big US companies have used the interplay of European and US tax laws to pay very little tax on profits earned in European markets… There is no doubt that this needs to change and that the amounts paid by many of these companies has been indefensibly low.”

I applaud the Irish Times’s columnist, Fintan O’Toole, for arguing that Ireland should take the money and then use it “properly and rigorously” in order to make “an epoch-making, transformational intervention” for the good of the Irish people.

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