A Taxing Case

Apple won its appeal of a European Commission ruling that it owed €13 billion ($15 billion) in back taxes because Ireland had illegally subsidized the company.

The General Court agreed with Ireland’s argument that the matter wasn’t an illegal subsidy because the nation cut similar tax deals with all comers.

The EU, of course, is not happy. It’s Tax Justice Coordinator (no irony in that title), Tove Maria Ryding, said,

If we had a proper corporate tax system, we wouldn’t need long court cases to find out whether it is legal for multinational corporations to pay less than 1% in taxes.

She’s not far wrong, but not in the way she intends. If the EU had a proper corporate tax system, if it were truly interested in tax justice, if the rest of the member nations had proper corporate tax systems, the EU and its constituents would have far lower tax rates and be more effective competitors with Ireland, Luxembourg, and Netherlands on taxes and business attractions.

Then neither the EU nor its other constituent nations would need long court cases in efforts to force low-tax nations to raise their taxes, which would only be to the detriment of those nations’ businesses and citizens. And the EU and those other constituent nations’ citizens could share in the prosperity the citizens of the three enjoy, rather than forcing those to their prosperity and opportunities to the level of the rest.

Market Performance

Great Britain has decided to bar the People’s Republic of China’s telecom company, Huawei, from participating in the British build-out of their 5G network.

The PRC isn’t happy. Foreign Ministry Spokesperson Zhao Lijian:

Whether the UK will provide an open, fair and non-discriminatory environment for Chinese businesses offers a telling clue to how the post-Brexit British market will perform and how secure China’s investment will be in that country. So, we will be closely following the situation.

I certainly hope it’s a telling clue, given that PRC companies are extensions of that government’s intelligence gathering facility.

Besides, diversity in 5G network buildout and operation, which will be facilitated by avoiding Huawei participation and domination, will only enhance the communications market; enhancing national security in the several nations is a happy additional outcome.