Amareos

Ryan Shea

Thematic (Sector/Industry)

The EU decision to order the Irish government to collect EUR13bn in back taxes from Apple has been a hot topic of debate in recent days.With many fed up with what they see as the ability of large supra-national companies to engage in tax regulation arbitrage the ruling has populist support. However, the Irish government is not pleased and finance minister Noonan has announced that he intends to appeal against the ruling even though the revenue it would generate equates to a quarter of annual government spending in Ireland – not an everyday occurrence.For Apple the decision, while significant – EUR 13bn is not pocket change even for a company renowned for its large cash reserves – is hardly a game changer and this is how the crowd appears to be viewing it based on the sentiment data we track. But, for Ireland, the EU’s actions are extremely significant.Saying that the low tax regime is the keystone of Irish macroeconomic policy hardly constitutes hyperbole. It is also a key element of national sovereignty. The Irish have no desire to see the EU encroach further in this area, but for the EU to complete its grand plan of monetary and fiscal union, encroach it must.It is these longer-term political and economic tensions that flow from the EU’s ruling on Apple’s tax bill that makes this such an important event for investors.

The EU decision to order the Irish government to collect EUR13bn in back taxes from Apple has been a hot topic of debate in recent days.With many fed up with what they see as the ability of large supra-national companies to engage in tax regulation arbitrage the ruling has populist support. However, the Irish government is not pleased and finance minister Noonan has announced that he intends to appeal against the ruling even though the revenue it would generate equates to a quarter of annual government spending in Ireland – not an everyday occurrence.For Apple the decision, while significant – EUR 13bn is not pocket change even for a company renowned for its large cash reserves – is hardly a game changer and this is how the crowd appears to be viewing it based on the sentiment data we track. But, for Ireland, the EU’s actions are extremely significant.Saying that the low tax regime is the keystone of Irish macroeconomic policy hardly constitutes hyperbole. It is also a key element of national sovereignty. The Irish have no desire to see the EU encroach further in this area, but for the EU to complete its grand plan of monetary and fiscal union, encroach it must.It is these longer-term political and economic tensions that flow from the EU’s ruling on Apple’s tax bill that makes this such an important event for investors.

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