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31/08/2016
Ireland Must Recover €13bn In 'Illegal Aid' From Apple
Ireland granted Apple "undue tax benefits of up to €13 billion", according to a new ruling by the European Commission (EC).
The EC launched an in-depth state aid investigation in June 2014, which has now ruled that two tax rulings issued by Ireland to Apple substantially and artificially lowered the tax paid by Apple in Ireland since 1991.
Commenting on the ruling, Commissioner Margrethe Vestager, who is in charge of competition policy, said: "Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules. The Commission's investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years.
"In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014."
The EC has said that the Irish government must now work to recover the "illegal aid".
However, the Minister for Finance, Michael Noonan, has said that he "profoundly disagrees" with the Commission's ruling and is to seek Cabinet approval to appeal the decision.
Minister Noonan, said: "I disagree profoundly with the Commission's decision. Our tax system is founded on the strict application of the law, as enacted by the Oireachtas, without exception.
"The decision leaves me with no choice but to seek Cabinet approval to appeal the decision before the European Courts. This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state aid rules into the sovereign Member State competence of taxation.
"It is important that we send a strong message that Ireland remains an attractive and stable location of choice for long-term substantive investment. Apple has been in Ireland since the 1980s and employs thousands of people in Cork. The company has continued to expand its operations in Ireland in recent times."
The Cabinet has two months and 10 days to bring forward an appeal. During the time, €13bn will be recovered from Apple and held in escrow.
(MH/LM)
The EC launched an in-depth state aid investigation in June 2014, which has now ruled that two tax rulings issued by Ireland to Apple substantially and artificially lowered the tax paid by Apple in Ireland since 1991.
Commenting on the ruling, Commissioner Margrethe Vestager, who is in charge of competition policy, said: "Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules. The Commission's investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years.
"In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014."
The EC has said that the Irish government must now work to recover the "illegal aid".
However, the Minister for Finance, Michael Noonan, has said that he "profoundly disagrees" with the Commission's ruling and is to seek Cabinet approval to appeal the decision.
Minister Noonan, said: "I disagree profoundly with the Commission's decision. Our tax system is founded on the strict application of the law, as enacted by the Oireachtas, without exception.
"The decision leaves me with no choice but to seek Cabinet approval to appeal the decision before the European Courts. This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state aid rules into the sovereign Member State competence of taxation.
"It is important that we send a strong message that Ireland remains an attractive and stable location of choice for long-term substantive investment. Apple has been in Ireland since the 1980s and employs thousands of people in Cork. The company has continued to expand its operations in Ireland in recent times."
The Cabinet has two months and 10 days to bring forward an appeal. During the time, €13bn will be recovered from Apple and held in escrow.
(MH/LM)
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