The Word on the Week

Apple Tax

Like Eve Ireland has taken the forbidden fruit (Genesis Chapter 3 verse 6). We broke no laws says the Minister of Finance. You had bad laws because they favoured Apple says the European Commissioner. We will appeal your decision because you are interfering with our sovereign right to run our own tax system responded our Minister. We will also appeal says Apple as we can show we pay 26.1% tax globally.
And so the scene is set to run and run with enthusiastic lawyers welcoming the distraction from Brexit, which is adding to the European economic and refugee crises, while they gather up the windfall in fees!
Just as one bad apple can contaminate the crop there is some consternation that other multi-nationals domiciled here may be examined. The EU Commission ruling came from their 800 strong staff which tackles unfair competition. It maintains that we favoured Apple over other fruit!
The calculation of back-tax at €13 billion (plus penalties) includes all its European profits and locates them in their Cork ‘Head Office’. The Commissioner mentioned that other European countries may look for a slice representing the profit on sales in their domain. The only sure thing is that we will be lucky if we ever get a slice of the Apple pie!
In 2011 our Finance Department published our Tax three “R’s” – Rate, Regime and Reputation. The Corporation Tax Rate is not under threat we are told and will remain at 12.5%. They pruned the Tax Regime to some extent in 2013 but by then the probe into Apple was under way and lasted till its findings were made known last Tuesday. As for cultivating a Reputation it’s downhill all the way. Having been called the “Liechtenstein on the Liffey” and more recently accused of “Leprechaun Economics” we have now become the “Bad Apple” of Europe!
A lot has to do with image. In the beginning the pair that took the forbidden fruit in the garden were made in the image of God (Genesis Chapter 1 verse 27).
When asked to pay taxes Jesus affirmed the rightness of paying the Denarius to Caesar as his image was on the coin. He added that in a similar manner we should pay to God what is God’s. Of course he was referring to us being made in His image, one which was marred by sin but restored by those who embraced the Gospel.
This prompt St Paul writing to those thus restored in the Church in Rome to encourage them “…to present your bodies as a living sacrifice, holy and acceptable to God, which is your spiritual worship. Do not be conformed to this world, but be transformed by the renewal of your mind, that by testing you may discern what is the will of God, what is good and acceptable and perfect. (Romans Chapter 12 verses 1-2). Thus imagining our Creator/Redeemer – Jesus.
Tim Cook, Apple’s CEO, referring to Ireland said “It’s all about people”. That’s only half the story. There needs to be an act of redemption before people act aright, collect the taxes and put the Apple back in the box along with the other fruit!