The legal battle between Brussels and the Irish Government over Apple’s tax arrangements has intensified.

The European Commission’s final report on its controversial ruling that the iPhone maker paid far less in tax than it should is supported by voluminous documentation.

Amid the sea of accountancy and legal arguments is a moral issue.

Is it acceptable that the world’s most valuable company by market capitalisation is paying minuscule amounts of tax?

Whether it is legal or not will be decided by the European Court of Justice. 

The company has two subsidiaries in Ireland which had no physical presence and no employees.

The report shows one of the subsidiaries had profits of $25bn in 2014.

But it paid less than $10m in tax.

One of the most illuminating parts of latest report is the note of a meeting between Apple’s tax advisors and the Revenue Commissioners in 1990.

It shows the company and the Revenue were trying to settle on a figure which would be attributable to Apple’s Irish activities.

The note of the meeting contains the following paragraph:

[Irish Revenue] asked [Apple’s tax advisor] to state if was there any basis for the figure of $30-40m and he confessed that there was no scientific basis for the figure. However the figure was of such magnitude that he hoped it would be seen to be a bona-fide proposal. As it was not possible to gauge the figure in isolation [Apple’s tax advisor] undertook to extract details of the actual costs attributable to the Irish branch.”

It may seem extraordinary in 2016 that there was such a hazy approach agreeing how much of Apple’s activities would be subject to tax in this country.

However, in 1990 Apple was not the corporate beast it is today. It was much smaller and far less successful.

Where the Revenue perhaps made a mistake was when it reconfirmed the arrangement with the company again in 2007.

By that time tax policies across the world had changed dramatically and Apple was a much larger company.

The European Commission also said Apple has $186bn untaxed money sitting off shore.

If the incoming US president Donald Trump manages to reform structures and lower corporation tax companies such as Apple could repatriate money to the States where it would be taxed.

Many US presidents since the 1970s have pledged an overhaul of US tax structures. However, none have succeeded.

The European Commission insists that Ireland collects €13bn in tax from Apple. But the Government is standing by its position that the money is not attributable to the company’s activities in Ireland.

The European Commission has adopted the position that the money in question could be due to other countries.

However, if that is the case then why should it be collected by the Irish authorities?

Regardless argument regarding where the profits should be taxed the main point is that Apple and many other multinationals have paid far less tax then they should.

That has short changed taxpayers somewhere. Huge sums which could be used for building schools, roads or hospitals have remained under the control of a multinational. 

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