Brexit May Make U.K. More Attractive to Multinationals After EU's Apple Ruling

LONDON -- In theory, quitting the European Union would free the U.K. from the sort of EU oversight that on Tuesday resulted in Brussels ordering Ireland to recoup some EUR13 billion ($14.5 billion) of what it called unpaid taxes from one of its biggest multinational investors, Apple Inc.

That and the country's low corporate tax rate could burnish post-Brexit Britain's allure for multinational companies, provided it maintains a high degree of access to the EU's huge single market for goods and services, tax experts say.

The EU's antitrust regulator on Tuesday demanded Ireland recoup the EUR13 billion, plus interest, from Apple after ruling that a deal between Apple and Dublin allowed the technology giant to avoid almost all corporate tax across the entire bloc for more than a decade.

Apple said it would appeal the decision, as did the Irish government.

The tax clawback attempt is the highest ever demanded under the EU's longstanding state-aid rules, which forbid companies from gaining advantages over competitors because of government help. The ruling also represents the latest salvo in a global crackdown on perceived tax avoidance by big, globe-trotting firms.

As an EU member, the U.K. is bound by EU tax laws as well as the anti-state aid rules that led to the judgment against Apple until it leaves the bloc -- a process that is still expected to take more than two years. It is unclear whether ditching state aid rules entirely will be possible for the U.K. if it wants to maintain unfettered access to the single market. Non-EU members such as Switzerland, for example, have had to agree to abide by the rules as well.

Stephen Herring, head of taxation at the U.K.'s Institute of Directors, a business lobby group, said leaving the bloc should nevertheless give Britain some extra scope to ensure its tax regime is competitive.

"I think the U.K. will have some more wriggle room," he said.

The U.K. has been at the forefront of international efforts to reduce tax avoidance while at the same time cutting corporate tax rates at home. Bill Dodwell, head of tax policy at consultancy Deloitte LLP, said the U.K.'s mix of low tax rates and its tough line on avoidance is "a sensible strategy."

Former Treasury chief George Osborne, who resigned in July following Britain's June 23 vote to exit from the EU, argued such an approach would ultimately boost government revenue.

He legislated in March to lower the U.K.'s main rate of corporate tax to 17% by 2020 from 20% currently. That would make the U.K. corporate-tax rate the lowest in the Group of 20 advanced and developing economies.

He also floated the idea of cutting corporate taxes even further in the wake of the referendum result, to reassure multinationals that the U.K. remains "open for business." His successor, Philip Hammond, has said he would wait and see how the public finances are coping with Brexit before pledging the same.

A Treasury spokeswoman said Tuesday that Mr. Hammond will set out his tax and spending plans toward the end of the year in a regular financial statement to Parliament. A spokesman for the prime minister's office said the U.K. would welcome any company that wished to relocate here. But he said the Apple ruling was a matter for the company, the Irish government and the European Commission, the EU's executive arm.

Write to Jason Douglas at