Ireland’s love affair with Apple as passionate as ever
Business Week: French finance minister gets the dig in at Davos as Brexit becomes law
Apple chief executive Tim Cook is presented with the inaugural IDA special recognition award by IDA chief executive Martin Shanahan, Taoiseach Leo Varadkar and IDA chairman Frank Ryan. Photograph: Niall Carson/PA
“How do I love thee? Let me count the ways,” begins the 19th century sonnet by Elizabeth Barrett Browning.
In the case of tech giant Apple’s relationship with Ireland, there are about 13 billion of them, but, this week, the State saw fit to add one more as it presented chief executive Tim Cook with an award to recognise the company’s 40-year presence here.
There were more than a few eyebrows raised at the move, especially with the tax arrangements of major multinationals and states such as Ireland under intense scrutiny these days.
Taoiseach Leo Varadkar was in charm offensive mode, showering Cook with praise for its role in making Ireland the “tech capital of Europe”, while Cook, for his part, described Ireland as the company’s “second home”. It would almost bring a tear to your eye.
There was only brief mention of the appeals by Apple and the State to the European Commission’s ruling that the company pay the Government €13 billion (plus interest) in back taxes for illegal tax benefits it received over two decades.
In case we needed reminding, Oxfam produced a report earlier in the week calling for governments to crack down on tax loopholes in order to raise the revenue needed to invest in public services and reduce global inequality.
It said Ireland has the fifth-largest number of billionaires per capita in the world. We now have 17 of them, the vast majority of whom are men, ranking us behind just Hong Kong, Cyprus, Switzerland and Singapore.
Returning to corporate tax though, Organisation for Economic Development (OECD) secretary general José Ángel Gurría said he was confident international reform centred on taxing the “digital economy” can be agreed this year, something Minister for Finance Paschal Donohoe has said could cost the exchequer €2 billion a year.
French finance minister Bruno Le Maire, speaking at the World Economic Forum in Davos, Switzerland, had a swipe at countries – and one in particular – that are benefiting from taxes, applied at low rates, on technology companies that are making money from consumers elsewhere in Europe.
“I don’t want to name that country, but everybody knows which country I’m thinking of,” said Le Maire, who is known to have been referring to Ireland. “A race to the bottom is not the future I want for Europe.”
Also speaking at Davos, which was hosting the 50th edition of the summit, IDA Ireland chief executive Martin Shanahan said the digital tax regime could lead to “more subdued levels” of foreign direct investment for the State.
Separately, a study by the Economic and Social Research Institute argued that the Republic has the most progressive personal tax system in the EU in terms of delivering income equality.
Brexit deal becomes law
Staying friends with your exes can be a tricky business, but that’s exactly what European Union leaders pledged to do this week as they signed the divorce papers and waved goodbye to the United Kingdom.
“Things will inevitably change but our friendship will remain,” tweeted European Council president Charles Michel after signing the UK withdrawal agreement. “We start a new chapter as partners and allies.”
In Britain, Conservative Party MPs cheered as the deal became law having received royal assent from Queen Elizabeth after clearing all stages in parliament.
“At times, it felt like we would never cross the Brexit finish line, but we’ve done it,” British prime minister Boris Johnson said.
The jubilation was not shared in Scotland or Northern Ireland as the SNP declared a “constitutional crisis”, while the Assembly in Belfast voted overwhelmingly to reject the deal.
Stephen Kelly of Manufacturing NI said he “remains to be convinced” that Johnson can deliver on his promise of “unfettered access” for goods moving between Britain and Northern Ireland post-Brexit.
That probably has something to do with the fact that the deal will see the North remain part of the UK customs union but subject to EU customs rules and oversight, as well as having to maintain regulatory alignment with the EU, creating a border in the Irish Sea.
Meanwhile, British chancellor of the exchequer Sajid Javid said in Davos that his government would focus on securing a trade deal with the EU over the United States as we move on to the next phase of this messy split.
Indeed, the love-in between London and Washington since Johnson came to power showed its first signs of trouble over Downing Street’s plans to introduce a digital tax in April.
US treasury secretary Steven Mnuchin, on the same Davos panel as Javid, said, “We’re pretty clear that the digital tax is discriminatory. If people want to put taxes arbitrarily on our businesses, we’ll consider arbitrarily putting taxes on car companies.”
That’s not to say talks with the EU are going to be easy. Javid signalled that Britain is planning to shift its economy further away from the EU. “There will not be alignment,” he said. “We will not be in the single market and we will not be in the customs union.”
At the same time, US president Donald Trump and European Commission president Ursula von der Leyen vowed to press ahead to reach a trade deal and ease tensions. Trump, however, couldn’t resist a dig, remarking that the EU was “more difficult to do business with than China”.
Speaking of China, its vice-premier Han Zheng launched a strong defence of globalisation at Davos, criticising “unilateral and protectionist policies” which, he said, “will lead nowhere”. No prizes for guessing who that was aimed at.
Elon Musk rolling in it
It’s a case of the rich get richer as electric car maker Tesla’s share value hit $100 billion (€90 million) this week following its recent launch in China.
The company surpassed a threshold that could ultimately unlock hundreds of millions of dollars in bonuses for chief executive Elon Musk.
Back home, The Irish Times established that Finance Ireland, the State’s largest non-bank lender, is actively working on plans for a stock market flotation this year, although it’s understood plans are at an early stage and subject to market conditions.