APPLE’S TAX DEBATE: GETTING TO THE CORE OF THE MATTER

The issue of corporate tax avoidance is often discussed in relative isolation, without really considering the efficiency and effectiveness those funds are used by governments or by the tax avoiding corporates. What “fair taxation” is, of course, may well be a philosophical discussion. Yet the recent EU decision about Apple’s tax ruling raises a number of questions that, in our view, have ramifications well beyond the domain of tax avoidance and competitiveness. These questions remain by and large unanswered in public discourse and hence, reveal large gaps in our broader understanding of tax policy and its societal implications.

First and foremost, we must ask ourselves whether we are overlooking the firm itself? For a complete understanding, we must consider the firm as a whole, as well as the multiple political environments surrounding it. Tax avoidance is an international issue, and as such it is not independent of politics. On the international stage, we are seeing a battle emerge between countries and institutions over the taxable income for multinationals. In terms of its current tax structure, both Ireland and the United States are contesting the EU ruling as a unilateral decision that affronts the multilateral efforts made by global countries to revise the international tax system.

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