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Sena te 2013) and in Europe it is about 7% (Eurostat 2014 ). Yet de spite its im-
portant role, the practicality and enforceability of corporate tax is challenged by
globalization and 55% of all the foreign p rofits of US firms are now kept in tax
havens such as Ireland, Luxembourg and Switzerland . In fact, MNCs have
amassed $2.6tn in p rofits in such states (Zucman 2014). I explain how the interna-
tional tax system create s opp ortunitie s for profit -shifting, how the political econ-
omy of small sta tes like Ireland are geared up to facilitate this, and why.
Essentially, Ireland behaves like a typical tax haven in that it undercuts the tax
rates of larger state s to attract Foreign Direct Investm ent (FDI) from MNCs like
Apple. This relationship helped transform Ireland into one of the richest per-capita
economies in the world and Apple into one on the largest companies in the world.
I examine how Apple avoided tax, the extent to which they avoided tax, and their
financial versus moral m otivations for doing so. However, these insights general-
ize to many MNCs operating out of states like Ireland, and US tech firms in par-
ticular. By 2017 Apple had worldw ide net sales of $229bn, net income of $48bn
and held $285bn in cash and cash equivalents on its balance sheet. This ‘cash
mountain’ has been widely publicized, correspond s substantially to the profits of
Apple’s foreign subsidiaries, and drew attention from US and European authori-
ties. Following US Se nate and EC inve stiga tions into Apple’s tax structures in Ire-
land in 2013, Ireland was accused of having grante d special deals to Apple (which
both Ireland and Apple strongly refute) that he lped Apple avoid corporate tax on
alm ost all pr ofits generated in the EU for nearly a quarter of a century. The EC
concluded in 2016 that the deals had breached EU state aid rules and ordered Apple
to pay €13bn in back-taxes to Ireland (European Commission 201 4); a ruling that
both Apple and Ireland contested.
But herein lies the puzz le in paper four: Why is Ireland intent on fighting an EC
ruling that grants it billions of euros in back-taxes? My analysis shows that it was
because Ireland’s government wanted to protect its economic model of attracting attracting
