Irish rocker Bono once said Ireland’s low-tax, pro-Big Tech economic model had brought the country of 5 million the only prosperity it had ever known.
But that prosperity came at a price, from lost investment at home to lost reputation abroad as huge taxable profits vanished under countries’ noses. Now that judges in Luxembourg have backed an order for Dublin to claw back €13.8 billion ($15.2 billion) in benefits illegally granted to Apple, what happens next should compensate all victims of a broken corporate tax system and fix it for the future.
Willingly forgoing billions in taxes doesn’t just happen overnight with a wink and a fax from the Irish finance ministry. It’s the grim conclusion of decades of aggressive tax planning from multinational corporations and their advisers shopping for the best deals; cutthroat competition between countries driving tax rates inexorably downward; and a huge creaking edifice of laws that offer tantalizing loopholes in the digital age. The code that effectively granted Apple’s Irish unit a tax rate of 0.005% was one low point among many during the boom in profit-shuffling, patent-licensing chains used by everyone from Alphabet to Starbucks.
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