Two significant things happened recently in the international debate on multinational tax. First, the United States went openly on the offensive in support of its big companies, putting significant pressure on the European Commission in its investigations.

Second, it became increasingly clear that the companies involved were taking a significant hit to their reputations which, for some anyway, will be a big factor. When the Apple boss Tim Cook comes to Brussels to meet the commission, he is doing so because this is now significant for his company and, most likely, Apple's big investors are on his case.

This story is not going away and as exchequers across the world battle for tax dollars and the big companies shrug and say they obeyed the rules it is not clear where it is going to end. But the genteel changes being piloted through a process overseen by the OECD to try to close off tax loopholes does not look like it is moving quickly enough or far enough to end the controversy.

Occasional debate

For years the issue of multinational tax has bubbled under the surface, with occasional debate about how the big US players often paid so little on profits earned outside the US.

By now the story is familiar. The US system in general allows earnings held outside the US to remain clear of American corporate tax, provided they remain offshore. To avail of this, big players have set up complicated structures to channel money out of Europe and into tax havens such as Bermuda, where they remain untaxed.

Ireland has been a funnel in this arrangement, with our tax system proving useful as a place through which European profits can be moved, then going onwards to a tax haven.

We are told this has all been legal and in most cases it may well have been. But the structures set up by the big US players are, on any common-sense view, an abuse. They may be legal, they are undoubtedly ingenious, but anything that allows a company earn billions in profit, pay a few per cent in tax on it and park it offshore is a nonsense. The structures used in many cases have little connection to real economic activity or where it happens .

With countries scrambling for tax revenue after the economic crash, the multinationals are coming under pressure on two fronts. The first is investigations by the commission and national tax authorities, probing whether the arrangements were in all cases legal. The second is the PR impact . Don’t underestimate this, either.

In the boardrooms of Apple, Google and the rest this will now be a big issue, affecting their reputations and unsettling investors who were told everything had been done by the book.

Now Google has paid £130 million in a UK tax settlement and may have to pay more in France and Italy; and a range of other inquiries and flashpoints has emerged .

The big one is Apple. The commission investigation, which is into Ireland’s tax arrangements with the company, may find this country undercharged Apple by an amount running into billions of euro. This is what has pushed the US administration to act. As we reported here, the issue has been discussed at a US Senate committee which said the US should react against EU companies in the US if Brussels goes too far. And this weekend a senior administration official, Robert Stack, has again openly accused the Europeans of targeting US companies.

Full support

This is a clear shot across the bows of the commission as it reaches the end of its Apple probe. It puts it up to competition commissioner

Margrethe Vestager

, who is heading the state-aid inquiries. Has she the full support of the commission? We will find out soon enough.

The situation looks increasingly messy. The UK government is under pressure, accused of going too easy on Google. Other EU national authorities are trying to get their slice.

The commission is, in effect, getting ready to say state-aid rules were broken in Ireland over many years. Nobody seems clear what the rules are now, or where this is going. What is clear, however, is that the attempts via the OECD to combat tax base erosion has not taken the heat out of the situation.

There could be a major scrap brewing, and Ireland would be in the middle of it. Apple has some $200 billion parked offshore, much of which passed through Irish subsidiaries over the years. Ireland may take the Fr Ted defence that the money was only resting in our account for a short period. But if we are told we need to collect a few billion in back tax from Apple, what are we going to do?