Apple’s Irish Tax Exposure Opens Up International Debate

In fact, Ireland's favorable tax regime for corporations – domestic as well as multinational, albeit much lower than elsewhere in Europe, was always just one of the factors driving the nation's economic growth in the years before the crisis.

"If we think of the Irish boom, we should define it in terms of stable growth on the basis of sound economic expansion from 2001-2002, and tax was a part of it over that period of real growth," Collins said. "During that period of stability, the government, the trade unions and the employers were, to a certain degree, communicating with each other for the progress of the Irish economy and for the stability of macroeconomic indicators."

A country whose lingua franca is English and that is committed to the euro was also well-located within the single European market, Collins said, "so if you operated and traded in Ireland, you had access to all of the euro market, and that helped to make transactions easier. We did have a large amount of investments flowing into Ireland at that time compared to the size of the economy and we also had a young and educated workforce, which, by comparison to Europe, was also a cheap workforce."

For corporations looking for affordable overseas options, then, Ireland was an attractive nation, and it still is. But like any other nation, attracting investment from multinational companies isn't enough and now more than ever, nations everywhere need to look out for themselves by ensuring that even if they offer a welcoming tax climate for business, they should also reap some of those benefits. Because clearly, even as a host nation, Ireland did not benefit from Apple's clever tax shifting (since 2003, the company has paid a 2% tax rate in Ireland), Collins said, so an international, cooperative tax model is all the more important to a vulnerable economy.

Looking ahead in the short term, Ireland's export sector – which developed nicely during the years of economic prosperity – will play its part in helping to slowly draw the economy out of its slump. Both indigenous Irish companies and multinational concerns have been growing, even as the flow of exports depends on both the pan-European as well as the global economic climate. But there's no denying that the effects of the recession have been gone deep (Ireland's unemployment rate is 14%) and it will take a long time for Ireland to recover completely from the damage.