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EC Publishes Apple Tax Ruling

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EC Publishes Apple Tax Ruling

EC Publishes Apple Tax Ruling
December 20
14:03 2016

The European Commission on Tuesday published its ruling on August 30 that Ireland effectively granted state aid to Apple. The release comes after the Departmnet of Finance published its legal arguments against the decision on Sunday, saying “Ireland does not accept the Commission’s analysis, which is why we have lodged an application with the General Court of the European Union to annul the whole Decision. Ireland did not give favourable tax treatment to Apple – the full amount of tax was paid in this case and no State aid was provided. Ireland does not do deals with taxpayers.”

The Department of Finance contends that the commission has “misunderstood the relevant facts and Irish law” and that Apple was compliant with the tax rules applicable to non-resident companies. The commission attributed Apple’s intellectual property lcienses to the Irish branches of Apple, which the state said was not consistent with Irish law.

The Department of Finance argued that Apple was not given an unfair advantage and accused the commmission of attempting to re-write Irish corporation tax rules. They Department of Finance also claims that the commission invoked OECD documents from 2010 to make their case, which would not be binding on event before that date, if at all.

The commission’s 130 page published ruling concluded that the tax rulings issued by Irish Revenue in favour of Apple “confer a selective advantage on those companies that is imputable to Ireland and financed through State resources, which distorts or threatens to distort competition and which is liable to affect trade between Member States. The contested tax rulings therefore constitute State aid… since the contested tax rulings give rise to a reduction of charges that should normally be borne by ASI and AOE in the course of their business operations, the contested tax ruling should be considered as granting operating aid to ASI and AOE.”

The ruling looked at examples, supplied by the Irish state, of other companies in similar situations were treated by Irish Revenue, and found that  “the choice of methods is not systematic even where the activities being described are similar.”

The European Commission’s ruling can be read here.

The Irish government’s response can be read here.

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