Apple, Ireland, and State Aid: The EC Decision

By: Sam Brunson

In August, the European Commission announced that Ireland had illegally granted state aid to Apple, and that it would be required to recoup over $13 billion in back taxes from Apple. (Surly coverage here.)

All of the analysis at the time was tentative, though, because, before it could release its decision, the EC had to redact it. And on Monday, it released the redacted version.[fn1] All 130 pages of the redacted version. So now we get to dig into its content.  Continue reading “Apple, Ireland, and State Aid: The EC Decision”

Ireland, Apple, and State Aid

EUMaybe you heard: Apple owes up to €13 billion in back taxes, plus interest, to Ireland. And maybe you also heard that Ireland doesn’t want Apple to pay. So what’s up?

appleFirst a caveat: I don’t have any particular expertise in European Union law, so I’m going off of news reports[fn1] and the European Commission’s press release. (As of when I’m writing this on Tuesday afternoon, the actual opinion isn’t up on the EC’s website. I’ll add a link when it’s available.)

In short: members of the EU can establish their own tax systems; the EU doesn’t have any authority over those systems. Over the last two years or so, though, the EC has been looking at special tax deals member countries have been giving to companies; where it finds that a country has provided special tax treatment to one particular company (and not granted similar tax treatment to other companies), it has held that the country provided “state aid” to that company. The EU treaty prohibits state aid and, when a member country provides such aid, the EC can require that country to recover the taxes it should have collected from the company in question. Though this Apple ruling is the most recent, last year the EC determined that Luxembourg and the Netherlands had used tax rulings to provide state aid to Fiat and Starbucks, and it is still looking into tax rulings provided by Luxembourg to McDonald’s and Amazon. Continue reading “Ireland, Apple, and State Aid”