Our tax problem is more than just one rotten apple

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Today's decision by the Court of Justice of the European Union demonstrates that the international system for taxing multinational corporations continues to be deeply complex, unpredictable and unfair.

Today the Court of Justice of the European Union sided with the European Commission in the state aid case concerning tax rulings issued by Ireland which determined Apple’s tax payments in the country. The Court concluded that Ireland’s rulings constituted unlawful state aid that the government is required to recover.

Commenting on the decision of the Court, Tove Maria Ryding, Tax Coordinator at the European Network on Debt and Development (Eurodad) said:

“While we welcome the Court’s decision, it is important to stress that our tax problem is more than just one rotten apple. The international system for taxing multinational corporations continues to be deeply complex, unpredictable and unfair.

“This case has been going on for over 10 years, and addressed tax matters dating back over 20 years. It is a perfect illustration of the chaotic corporate tax system we have. If we had a fair, transparent and effective global tax system, it would not take over 10 years to determine whether it was legal for a corporation to pay well under 1 per cent in tax.

“This case has focused on how much tax Apple should pay in Ireland. But the point that has not been in question is why the right to tax profits generated all across Europe, Africa, the Middle East and India only belongs to Ireland. In a fair tax system, the right to tax would be divided fairly between all the countries where the corporation has economic activity, including developing countries.

“What we urgently need is a fundamental reform that can give us a tax system that is fair, effective, transparent and predictable. The UN has just started negotiating a new UN Convention on International Tax Cooperation which will address the issue of equitable taxation of multinational corporations. That is our beacon of hope for a fairer future.”

ENDS


Media Contact: Julia Ravenscroft, Communications Manager, Eurodad: [email protected]/ +44 7958 184 695

Notes to editors:

  • Today’s ruling by the Court of the European Union can be found here. The case concerns the 2016 European Commission decision that Ireland’s tax treatment of Apple, enabled by two tax agreements, provided a selective advantage amounting to state aid. This decision included an order for Ireland to recover approx. €13 billion.
  • The European Commission’s press release from 2016 can be found here.
  • For more information on the UN tax process, see this press release from 19 August 2024 – After the landslide vote, the UN adopts ambitious mandate for three legally binding global tax deals