Ireland’s FDI To Be Determined By Apple Tax Ruling
Industry experts have warned that an adverse ruling by European Commission in the lawsuit against Apple for improper tax arrangements could have long-term and unfavorable implications for Ireland’s investment prospects.
The European Commission is investigating Apple and a number of multinational companies to determine if they have taken advantage of special treatment and benefited from special tax arrangements in countries such as Ireland.
The commission is expected to make a decision and announce its ruling in the coming weeks.
Tim Cook, Apple’s Chief Executive Officer recently concluded a meeting with the head of the European Union’s Competition Commission, Margrethe Vestager but no comments has been issued by either party regarding the discussion or the outcome of that meeting.
If the European Commission rules against Apple, the company will be required to pay $19 billion to Irish authorities in retroactive tax. With reserves of over $140 billion, the financial impact for Apple will be minimal. However the ruling will have a significant bearing on companies looking to make a decision on investing in Ireland, affecting the amount of Foreign Direct Investments that comes into the country.
In a statement, David Holohan Chief investment officer of Merrion Stockbrokers has said,
While the investments that are in the country at the moment are likely to remain in place, I think further investments would be put at risk if there was a significant change, because that would change their return calculations in the investment decision.
Ireland’s corporate tax regime for businesses has proven to be very successful in attracting investment and jobs into the country. Holohan believes that any change to it or the possibility of back taxes could warn off potential investors.
An adverse ruling could also probably impact Apple’s stated plans for expansion in Ireland. Cook has promised to bring more investments and jobs to the country in a recent visit. He has committed to adding 1,000 jobs to Apple’s existing facility in Cork, bringing its total employees in Ireland to 6,000. The company is also intending to build a large data centre in Athenry, Co Galway.
The Irish government is maintaining its position that the European probe is unwarranted. Defending its policy, Taoiseach Enda Kenny has declared that Ireland cannot be regarded as a tax haven and reiterated that his government’s tax authorities, or Revenue Commissioners, have not acted in any way favoring a company or a deal.
The European commission is also proceeding against other firms including Amazon and Starbucks regarding their tax arrangements in other European countries.
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Foreign exchange trading, known as forex trading for short, is all about the purchase and sale of currencies from different