A school teacher from Mayo and his pack of friends are in trouble for the last few days. Everybody is giving them grief over something that started 10 years ago, even before they had anything to say and were only dreaming of getting the big job.
The bigger boys wrapped our school teacher over the knuckles for something that he didn’t do and maybe didn’t even understand when he found out. But since he is in the driving seat at the moment, it is only fair that he has to take responsibility. And I tell you, he and his mates did screw up! But they screwed up intentionally and would do it again in a heart beat. They took money from these big boys and these big boys are not happy about that at all.
But on the other side, the people our schoolteacher wanted to help with the money (at least that’s what he – probably genuinely thought – are also not happy. And it is not just one gang, but two gangs that are complaining. So the Mayo man gets it from all sides.
We could nearly feel sorry for him….but then he has form on screwing up, he does that regularly probably because he just doesn’t know better, he is just a school teacher, you know and hadn’t learned any better. We all wish we had someone who knew what he or she was doing, but the whole country has NOBODY that knows any better, A little bleak, I know, so we just let him meddle on. Complain regularly, but nothing will ever change.
Our school teacher in this story is, of course, Enda Kenny and the story is about what would be called tax fraud if you and I did it. He and his cabinet weren’t even close to being in government in 2003 (or 2007) when the is special arrangement started. So I have some sympathy with them. The special tax treatment was just another mess that they inherited form the previous Fianna Fail government. BUT they didn’t even try to fix it.
What was happening? Apple (and others do that too!) sold products in other EU countries, but officially all products were sold from Ireland and not from the Apple companies in these other EU countries. So all the money went back to Ireland, even if that shouldn’t have been the case. The other EU countries are (I have to say: understandably!) not happy about that because they lost taxes. But they can’t do much against it, because it is not illegal. They are already annoyed about Ireland just charging this super low 12.5% corporate tax, but that is also not illegal. So they were trying to find something that WAS illegal to shake up the whole cosy arrangement that Ireland has with some companies.
They found out that Ireland is not really charging any taxes at all from Apple because Apple cleverly transferred the income from the other countries from one company in Ireland to another and that other company had got a sweet deal from the Irish government. Still nothing illegal, but dodgy nevertheless AND many would say STUPID!
Apple has a lot of money and to let them run their business virtually tax free in Ireland doesn’t make sense. Sure there are 5000 jobs that they have created, but if they had to pay a few % of tax instead of well below 1%, the deal would still be soooo good, that these 5000 jobs wouldn’t be in big danger.
So the Irish government should certainly have charged them some taxes!
When the other countries found out that Ireland was doing dodgy stuff, they said that this is like paying Apple money for being in Ireland. It is and it isn’t. Either way it is a form of tax fraud. When the guy who imported garlic from China declared it as Apples (which have a significantly lower tax rate than garlic – for NO apparent reason!) he got a prison sentence of 6 (!!) years a few years ago. The Irish government was not doing much else: Re-labelling you could call it! But they are the government, not a garlic importer so they get away with it.
But let’s face it, a little school teacher from Mayo and his gang wouldn’t dare a super big company to pay more, right? It’s an inbuilt inferiority complex that the Irish government has (don’t get me started on offshore oil and how they just give it as a give to the oil companies).
When the EU said that Apple will have to pay EUR 13 billion plus interest, Apple was understandably not too happy about that (despite the fact that they have around $231 billion in cash), the Irish government wasn’t happy either (they don’t like being wrapped over the knuckles and there is definitely a danger that other foreign companies in Ireland also could have to pay a lot of money. I wonder how Microsoft feels about all that!
So the Irish government HAS to challenge the EU decision because of that. They also have to be seen to defend Apple to show other companies that they stand up for the companies that come to Ireland.
But then there is the other side. Because of that inferiority complex, a few years ago the Irish government screwed up when it came to the bank debt and took on responsibility for debt that they shouldn’t have. So these 13bn would help nicely getting rid of some of that debt. Which means now that a lot of people in Ireland say screw Apple, screw the EU and let’s take that money. Maybe we use some of it to pay our debt back, but, hey let’s buy something nice from our windfall. (and that is another opinion).
A right mess? Definitely!! And it looks like a lose-lose situation for everyone involved. Don’t you love politics and even more so, don’t you love our competent politicians? ;-)