Taking a bite out of Apple

Author: James Kinsella
07 September 2016 16:47:53

What’s $15 billion among friends? The Apple tax case isn’t about taxes

Ireland, American high-tech giants’ favourite tax haven, has decided to fight the European Union’s decision that would gift it almost $15 billion of back taxes from Apple. Almost certainly, billions more would likely be required from other companies who have turned Dublin into one of the most unexpected tech HQs in the world. Picture courtesy of 'vector.me', titled 'Eaten Apple Logo Vector', accessible at 'http://vector.me/browse/218129/eaten_apple_logo_vector'

The Irish claim that $14.5 billion is not worth compromising Ireland’s sovereignty, not to mention its independence to cut tax deals with the masters of the digital universe. That’s what’s really at stake here, claims the Irish minister who is challenging the EU verdict.

The Irish have a partner – if not a kindred spirit – in their opposition to the EU move: the US. The Americans aren’t looking out for Irish independence. Instead, they want that tax cash and the other $2 trillion they estimate that US high-tech companies are keeping offshore, to avoid the comparatively steep 35% American excise on corporate profits.

And what does the EU want? It won’t get the tax revenues – those are Ireland’s, even if the Irish government says it doesn’t want the cash. Instead, the EU claims this is all about creating an equitable tax jurisdiction across the 27-member union (minus the UK, of course). But if that’s the case, there are a raft of other tax inequities that exist across the European Union. Why pursue Apple and the American giants so aggressively?

The guys at Apple, of course, say it’s the EU’s awkward attempt at trying to level the playing field for European tech companies. But that doesn’t seem quite right, either.  There are much more effective ways to boost European tech companies. At the top of that list would be enforcing the data privacy regulations that are already EU law.

Enforcing the General Data Protection Regulation would not only boost European tech businesses, but it would also help European citizens reclaim some of the rights they have lost by sending their data beyond the EU and into the worldwide cloud – where they have neither a say over how their data is used nor much right to redress when their privacy is clearly violated.

Money can’t buy justice. And for the EU, lots of cash can’t buy Ireland’s love. Ireland vows to have the EU ruling overturned, even if the settlement would mean the equivalent cash to fund the entire Irish health care system for a year.

What Ireland wants is sovereignty to determine how to tax its corporate refugees. And Ireland isn’t alone. The theme of the modern era is “national sovereignty” – over taxes, over borders and, increasingly, over data.

Data sovereignty, in fact, is one of the most rapidly growing areas of regulation of the cloud.  If Apple is irked about what it considers EU over-reach, just wait until it has to make sense of the myriad new laws that insist data created in a specific nation must adhere to the laws of that nation.

Russia, China, much of North Africa, the Middle East and, yes, even some EU member states, have all implemented some form of data sovereignty laws in the last six months.

 

Welcome to the new cloud.

James Kinsella is the founder of Zettabox, a European-based cloud-sharing platform, launched to address data protection and sovereignty issues for enterprises faced with the responsibility to comply with new EU regulations. A long-time tech entrepreneur, James is a proud citizen of both the US and Great Britain. Reach him on Twitter @jimkzettabox or at https://uk.linkedin.com/in/jameskinsella.