In September the European Court of Justice delivered a verdict in a long-running legal battle over whether Apple had benefited from unfair (and now closed) loopholes in Ireland’s tax code. As a result, the American tech firm will have to hand over €13bn ($14bn) to the Irish tax authorities, along with over €1bn of interest—an amount equivalent to 4.8% of the country’s annual national income. To the bemusement of other cash-strapped governments, the Irish authorities sided with Apple in its battles with Europe’s courts, arguing that the firm had done nothing wrong.
Irish policymakers are aware that the tax base is narrow as well as bountiful. In 2022 just ten firms accounted for three-fifths of corporate-tax receipts. Moreover, corporation tax amounted to 27% of all receipts that year, more than double the oecd average. Recognising this vulnerability, the Irish government intends to treat the Apple windfall in the same way that Norway treated North Sea oil revenues: it will set up a sovereign-wealth fund. Two separate pots are being established. Ministers hope their combined value will reach €100bn by 2040, at which point they will start to spend the income generated.
The Economist
I have a rather straightforward answer if the Irish government doesn’t want – or know what to do with – this massive Apple fine: contribute this to the EU budget! It was after all the European Commission who fought this legal battle and won, while Ireland argued against it. And most of these profits on which Apple avoided taxes for years were generated in other EU countries, not on their operations in Ireland.