European Competition Commissioner Margrethe Vestager will get a frosty enough response this week in Washington. But one thing is clear, a few weeks after the momentous decision that Apple owes Ireland €13 billion in "back tax", and that is that Vestager is winning the PR battle, a fact that her US hosts will be conscious of, as will the Government here.
The legal rights and wrongs of the European Commission’s decision on Apple’s tax arrangements in Ireland will be fought out line by line in the European courts. But, whatever happens in a few year’s time in the European Court of Justice, Vestager has grabbed the moment with what was effectively a huge political statement – that Apple owed billions in back tax. And Ireland is stuck right in the middle.
Ruthless efficiency
Whether Vestager’s case holds up in the courts or not, the details of these tax schemes have, since they started to emerge fully a few years ago, shown a ruthless efficiency in cutting tax bills by many of the big US multinationals. This may, in many cases, have been legal – and, as regards Apple, the courts will rule on this – but it is completely indefensible.
In PR terms, the Commissioner is shooting at an open goal – and the very scale of the tax she claims Apple owes to Ireland has put the Commission at the centre of this big global battle over how multinationals will pay more tax.
Whether her technical legal arguments hold up or not, Vestager has engineered a political coup. The only scrap of comfort for Ireland was her insistence on Monday in Washington that our corporate tax system was not in her sights and that most of the Europe-wide cases examined by the commission – including several hundred here – have generally been seen as okay.
It has been clear for a few years that multinationals were going to end up paying more tax. In an era where, post-crash, exchequers are squeezed for cash, their tax arrangements are unsustainable. Commissioner Vestager’s move has upped the ante, with goodness knows what consequences.
Whether she wins the legal battle or not, she is already well ahead in the PR war.
