Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

On 30 August 2016 the European Commission issued a negative decision in the Apple state aid case. The Government profoundly disagrees with the Commission's analysis in the Apple case and will now challenge the decision before the European courts.  Dáil Éireann has also passed a motion supporting the Government's decision to appeal the European Commission's decision.

Ireland has a period of two months and ten days to bring an appeal.  The appeal process may take several years.  Apple also has indicated that it will exercise its right of appeal.  An appeal to the European courts takes the form of an application to the General Court of the European Union, asking it to annul the decision of the Commission.

Ireland's position remains that the full amount of tax was paid in this case and no State aid was provided.  Ireland did not give favourable tax treatment to Apple.  Ireland does not do deals with taxpayers.

Notwithstanding the negative decision, no fine or penalty has been imposed on the State. The European Commission has stated: "This decision does not call into question Ireland's general tax system or its corporate tax rate".  No other companies are subject to this decision by the European Commission.

On foot of the Commission's decision, Ireland is required to recover up to €13 billion of alleged state aid from the company covering a ten-year period.  Notwithstanding the right of appeal, Ireland is legally obliged to recover the alleged state aid from Apple in the interim.  Given that this money may ultimately have to be returned to the company in the event of a successful appeal, the money can be held in escrow until the case has concluded.

The Commission has stated that the amount of unpaid taxes to be recovered by the Irish authorities would be reduced if other countries were to require Apple to pay more taxes on the profits recorded by Apple Sales International and Apple Operations Europe for this period; and the amount of unpaid taxes to be recovered by the Irish authorities would also be reduced if the US authorities were to require Apple to pay larger amounts of money to its US parent company for this period to finance research and development efforts. This illustrates the contradiction at the heart of the European Commission's decision.  While requiring Ireland to recover the tax sums, the Commission is also acknowledging that the sums may in fact be taxable in other jurisdictions.

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