When Europe Has the United States’ Blessing To Get Even with Apple

Every time Apple launches a product, the planet starts to buzz. The American enterprise is known as the maestro of staging this kind of free publicity. We’ve already seen this with the iPhone 6.

On the flip side, unless you regularly read business journals, there is very little media hullabaloo over the fact that the European Commission is in the midst of literally settling scores with Apple, all with the United States’ blessing.

At the same time, the European Commission is attacking Ireland on the grounds of disguised government aid. Why Ireland? Because this country only imposes a two percent corporate tax on its territory — one of the reasons why Apple established its headquarters there. Today, this American company is siphoning off money throughout the rest of Europe and the world, but it is finally getting to pay a very small amount of taxes through the fiscal arrangements set up in Ireland.

Back in the U.S., the Obama administration is frowning upon this situation since they can’t understand how an enterprise that is sitting on dozens of billions of dollars in cash doesn’t pay or just barely pays U.S. tax. They’re also not too shabby in the job creation department either!

And so, with the U.S. administration’s formal support, the European Commission is now home free to fight against what bystanders call “legal tax evasion.” Ireland isn’t the only targeted country in Europe, since the Commission also has its eyes on others like Luxembourg and the Netherlands, which managed to attract multinationals like Apple through tax propositions as well.

However much may have been said about how difficult it was adopting a single currency without a single tax system, this same message currently continues to fall on deaf ears. Nevertheless, the mere fact that the U.S. administration is back in the game means that things are going to speed up. Remember, the reason why Swiss banking secrecy crashed and burned is because the U.S. Internal Revenue Service was actually blackmailing Swiss banks. Either they gave up their bank secrecy or lost their U.S. banking license. The rest is history, since they preferred losing their clients rather than their licenses. It remains to be seen whether history will repeat itself with Apple and other relevant multinationals.