Deirdre Cummings
Legislative Director, MASSPIRG
617-747-4319
[email protected]
Legislative Director, MASSPIRG
617-747-4319
[email protected]
MASSPIRG
Yesterday’s European Commission ruling requiring Apple to pay $14.5 billion in back taxes to Ireland is a step in the right direction, as many profitable multinational corporations routinely dodge taxes by booking profits to tax havens. If the ruling stands however, it will still leave the company off the hook for $51.5 billion in U.S. taxes.
“Apple is far from the only player in the tax dodging game, but it’s certainly one of the best,” said Deirdre Cummings, MASSPIRG Legisaltive Director. “Apple’s accountants perform with the skill of Houdini when it comes to making profits magically appear on the books of subsidiaries in offshore tax havens. These subsidiaries are often little more than a P.O. Box and conduct little to no real business where they claim to be based.”
The tech giant is notoriously creative in how it cuts down its tax bill. In this case, the E.U. found that Ireland had been granting Apple the right to create a subsidiary that is not registered to any country and therefore does not pay income tax anywhere. The Commission found that this amounts to preferable tax treatment of the corporation, giving Apple an unfair advantage over businesses that do pay their share of taxes to the countries in which they operate.
According to a study by U.S. Public Interest Research Group and Citizens for Tax Justice, even once Apple pays the $14.5 billion the EU Commission has found the company owes to Ireland, the U.S. would still be short at least $51.5 billion in taxes that Apple has dodged.
“Corporate tax dodging isn’t a victimless crime—it’s a serious cost for ordinary Americans, and it means fewer tax dollars at work here in our country,” said Cummings. “When a corporation like Apple uses American infrastructure, the American educated work force, and American markets, and yet doesn’t pay what it owes in taxes, we lose out on funding for public programs, paying down national debt, or lowering taxes. The E.U. is taking a stand against this unfairness, and it’s time the U.S. does the same.”
Congress could take steps toward ending this type of corporate tax dodging by prohibiting the practice of deferral, which allows corporations to delay paying taxes indefinitely on profits attributed to offshore subsidiaries.
This latest ruling comes after the E.U. required Starbucks and Fiat Chrysler to repay back taxes last October.[1] The Commission currently has similar tax dodging investigations open regarding Amazon, McDonald’s, and Google.
[1] http://money.cnn.com/2015/10/21/news/companies/tax-starbucks-fiat-europe…