Is Brussels right to intervene in Ireland's tax policy?

It is great to finally see a small EU member state telling Brussels that the members of an economic union don't necessarily need common rules, Le Figaro comments:

“Greece with its olive oil is not Germany with its leading industry. And that is why, as [conservative economist and political advisor] Henri Guaino put it in his masterly book Putting an End to the Sacrifice Economy, 'Europe is becoming a laboratory for the process advocated by the globalisers want to achieve convergence through politicisation. … This flawed construction leaves no room for the variety of preferences, expectations and needs of each member state.' So in the aftermath of the ruling against Apple it is good to see a small country like Ireland thumbing its nose at Brussels by saying that it won't allow its political fate to be dictated by technocrats obsessed with the convergence of standards and prone to seeing everything in a global context.”

The Irish government should remain objective in appealing the EU ruling because it will be dependent on the goodwill of its partners in the Brexit negotiations, columnist Colette Brown warns in the Irish Independent:

“The Government, in pitching its objection to the EC ruling in divisive and militant language, is playing a dangerous game. Remember, when Brexit is finally negotiated, we will be imploring the same countries the Government is now smearing to recognise our special relationship with the UK. I'm no diplomat, but denigrating EU member states as greedy back-stabbers plotting to destroy our economy seems an odd strategy to employ if we want the terms of any Brexit deal to be remotely favourable. ... So, giving the EU the finger is not really an option, unless we have some kind of nationalistic death wish.”

Irish Finance Minister Michael Noonan's declared intention of contesting the decision of the EU Commission is unfathomable, the Irish Examiner believes:

“He is prepared to spend millions of Irish taxpayers' money to ensure that Ireland does not get up to €20bn (including fines and penalties) from Apple. Indeed, if the commission's ruling is not appealed and is enforced, there is every reason to believe that it could be applied to other multinationals, leading to a windfall of tens of billions of euro for Ireland. Who in their right mind would consider opposing such a windfall, especially considering the billions we had to pay to bondholders, funded by years of cuts and austerity?”

The EU Commission's approach in the Apple case is creating uncertainty and undermining the international battle against tax evasion and tax avoidance, The Economist complains:

“Firms that invest in Europe will be entitled to wonder what other deals reached with governments can be unwound retroactively. ... By using new arguments to fire broadsides at deals done long ago, the commission is not helping the fight against egregious tax-dodging. Ireland and other obliging European states, such as Luxembourg and the Netherlands, have already succumbed to pressure to close several of the loopholes of the past. Last year the OECD, a group of rich countries, led the way on a set of guidelines designed to crack down on avoidance. By going it alone the commission risks stoking conflict, not co-operation.”

The EU Commission's decision is right in many ways, Delo concludes:

“Although these tax practices have been known for many years, Brussels and the governments of the member states didn't undertake any concrete measures against them. It was only after the Lux-Leaks affair two years ago, when the deals through which multinational companies avoided paying taxes came to light, that Europe's politicians reacted. ... The end of these unscrupulous tax practices could also bolster the trust of Europeans in a system that has apparently allowed the major players to hide their profits while fleecing the little guys big time. What's more, Brussels' strict stance - particularly that of Commissioner Margrethe Vestager, who decided in favour of taking this risky step despite the pressure from Washington - could help to convince the increasingly sceptical citizens of the advantages of the EU.”

The European Commission's decision to make Apple pay back taxes in Ireland should have been the jolt Ireland needed to push through a thoroughgoing reform of its economic model, Äripäev writes:

“The reaction of the Irish government, which doesn't want the tax money from Apple and will appeal the decision, shows that these old economic models are tough. The government is not willing to give up any instruments that can be used to create even just a few jobs in the country. … According to the Washington Post each job created by Apple has cost the Irish state 220,000 dollars per year. … The terms of this agreement were worked out by Apple consultants because the Irish tax authorities weren't in a position to do this. The Irish tax gap means that other countries have also lost out on potential tax revenues. But it's the European Commission that gets the stick for having used state aid as a back door to interfere in tax affairs.”

One country in particular stands to benefit from the tax dispute, Corriere del Ticino observes:

“Behind Apple there are hundreds of other multinationals that have parked billions in profits in Europe's little tax havens and other more or less exotic places so as to pay less tax (the OECD talks of 240 billion but other sources put that figure at more than a trillion). These multinationals are waiting to see how the European dispute with Apple pans out so they can adjust their own tax plans accordingly. And who stands to gain if the attractive tax policies of certain EU member states are scrapped? If the UK is allowed to participate in the single market post-Brexit without being subject to the constraints of Brussels regulations, London may be the one to benefit from the new situation.”

With its decision the European Commission has resisted the pressure from the US and set an example for other regions of the world, the Tages-Anzeiger comments:

“African countries, states in the Middle East and also India may now take action, because they too missed out on taxes that Apple shifted to Ireland. But the biggest impact of the decision will be on relations with the US. Not long ago the US government openly threatened the EU with a tax dispute and warned it not to try to siphon off the profits made by US multinationals in Europe. It looks like the Treasury Department has become a self-appointed advocate of the multinationals and wants to prevent plans for the international coordination of business taxes. The first impression may be deceiving, but it seems that with its decision the EU Commission has come up with an effective answer to the Americans' bluff.”

Pravda welcomes the tax ruling against Apple:

“The key message sent by the European Commission is: 'We'll get you'. … Ireland may not be a tax haven but its tax rates are among the lowest. … Apple has exploited this for years, paying only 0.005 percent taxes on its profits in Europe in 2014. The confrontation over this may go on for years. But the EU Commission has the European public, which pays its taxes without special benefits and is constantly tightening its belt for a better tomorrow, on its side. Meanwhile the governments are being held to ransom by huge companies that dictate their own laws and rules.”

The Apple case faces the EU with a major decision regarding tax policy, El Mundo explains:

“The 13 billion euros are not just a problem between the Irish government, Apple and Brussels. In an economic union like the European Union this affair affects the legislation of all the other member states too: it's about harmonisation. … Regardless of what the judiciary rules, the Apple case underlines the need to make decisive progress in harmonising European taxes. Because there won't be a true economic union as long as governments are free to pursue a low-tax policy to attract investment. The EU member states should either adopt a uniform tax model that prevents cases like that of Apple or they should accept the fiscal sovereignty of the individual states with all the consequences this entails.”

Ireland's reputation as a secure and predictable investment location hangs in the balance, the Irish Times fears:

“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. ... The Government will argue - and there is a basis for this - that rule changes in recent years have closed off some of the tax arrangements central to the Apple case. However, the damning verdict by the commission on how tax was applied in the Apple case leaves the Government with little option but to lodge an appeal, given the central importance of foreign direct investment to our economy.”

The EU Commission's decision is not only unwise but also presumptuous, the Daily Telegraph rails:

“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. Nor is this an approach only applied to smaller states: last week, some EU leaders warned Britain against further cuts in corporation tax.”