Ireland Ordered to Recover €13 Billion in State Aid From Apple

Tax Notes Today and Worldwide Tax Daily
August 31, 2016

Douglas S. Stransky was quoted in an article published on August 31, 2016 by Tax Analysts in Tax Notes Today and Worldwide Tax Daily, entitled "Ireland Ordered to Recover €13 Billion in State Aid From Apple."

The article discusses the decision by the European Commission in the formal state aid investigation into two advance pricing agreements (APAs) obtained by Apple in Ireland. According to the European Commission, the APAs constitute illegal state aid, as they effectively enabled Apple to pay less taxes than other taxpayers in a similar legal and factual situation. The Commission claims the APAs unduly reduced Apple’s tax burden by EUR 13 billion. It now requires Ireland to recover such amount (plus interest) from Apple. Among his comments, Mr. Stransky explained the European Commission’s concern, noting that it found the internal allocation of profits among the Irish entities "objectionable . . . because it believes that this provides Apple with an unfair advantage and, more important, it believes that Ireland should have followed the arm's-length standard, as recommended by the OECD − even though such rules were not in Irish law at the time. In short, the commission seems to be saying that because Ireland did not follow the arm's-length standard by allowing profits to be allocated outside of such standard, it gave Apple an unfair advantage in violation of EU law."