Displaying items by tag: tax dispute

EU taking Ireland to court over Apple tax dispute

Written on Sunday, 15 October 2017 08:21

The European Commission is taking Ireland to the European Court of Justice for failing to recover from Apple illegal state aid worth up to €13 billion, as required by the Commission’s August 2016 decision. EU Member States have to recover illegal state aid within the deadline set by the Commission, which is usually four months.

The Commission concluded that Ireland’s tax benefits to Apple were illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. As a matter of principle, EU state aid rules require that illegal state aid is recovered in order to remove the distortion of competition created by the aid.

“Ireland has to recover up to €13 billion in illegal state aid from Apple. However, more than one year after the Commission adopted this decision, Ireland has still not recovered the money, also not in part,” said Commissioner Margrethe Vestager, in charge of competition policy. “We of course understand that recover in certain areas may be more complex than in others, and we are always ready to assist. But Member States must make sufficient progress to restore competition.”

The deadline for Ireland to implement the Commission's decision on Apple's tax treatment was 3 January 2017 in line with standard procedures, i.e. four months from the official notification of the Commission decision. Until the illegal aid is recovered, the company in question continues to benefit from an illegal advantage, according to the Commission, which is why recovery must happen as quickly as possible.

Today, more than one year after the Commission's decision, Ireland has still not recovered any of the illegal aid, the Commission claims. Furthermore, although Ireland has made progress on the calculation of the exact amount of the illegal aid granted to Apple, it is only planning to conclude this work by March 2018 at the earliest.

The Commission has therefore decided to refer Ireland to the Court of Justice for failure to implement the Commission decision, in accordance with Article 108(2) of the Treaty on the Functioning of the European Union (TFEU). If a Member State does not comply with the judgment, the Commission may ask the Court to impose penalty payments.

Published in Government