Apple has more than $215 billion in profits stashed offshore. Some of that money was made in Canada. The profits are in tax havens, mainly Ireland, which made a deal with Apple that resulted in tech giant paying an effective tax rate of less than 1 per cent a year for over a decade.
How much corporate tax has Apple paid to Canada? At this point your guess is as good as ours. But our partners at American for Tax Justice report that the US government could be owed up to $60 billion.
After an intensive three-year investigation,the European Commission ruled that Ireland’s tax arrangements with Apple were illegal and provided up to a 13-billion-Euro subsidy ($14.5 billion) plus interest, or “state aid,” to Apple through various forms of tax avoidance. “State aid” is a euphemism for what Canadian politician David Lewis used to call “corporate welfare.” And it is a pretty safe bet that of all the multinationals in the world, Apple doesn’t need taxpayers’ money.
The woman at the centre of the investigation, EU’s Magrethe Vestager, suggested other countries should examine how Apple did business within their borders and then claim a share of the unpaid tax from Apple for the same period.
“Absolutely agree,”says Canadians for Tax Fairness Executive Director Dennis Howlett. “Governments on both sides of the Atlantic should be working together to fight corporate tax dodging instead of looking the other way. So far, Canadians haven’t seen much leadership taking on these mega-dodgers. Prime Minister Trudeau should be standing up for regular taxpayers.”
Although Apple is one of the most aggressive tax haven users, it is definitely not the only one playing havoc with Canada's tax rules.
Canadians for Tax Fairness has launched a campaign to modernize Canadian tax law so that when digital companies like Google, Uber, Amazon make money in Canada, they pay tax in Canada. Currently, they benefit from a billion-dollar loophole that lets them claim that because they don’t have physical offices here, they aren’t doing business here.
“It is a giant shell game that is hurting both provincial and federal governments, but very little is being done to catch up with the digital economy,” says Howlett.
Agree that we need smarter rules? You can send an email to Ottawa right now demanding change.