Linked by Thom Holwerda on Tue 30th Sep 2014 09:20 UTC

We already reported on this one yesterday, but it's official now: after a preliminary investigation, the EU has accused Ireland of providing illegal state aid to Apple by means of Apple-specific low tax rates which the EU states do not conform to market standards. In addition, while there are certain specific cases in which state aid is legal, none of those seem to apply in this case. These cases cover things like aid to severely impoverished regions, natural disaster relief, important projects of common European interest, and similar things.

At this stage, the Commission considers that the measure at issue appears to constitute a reduction of charges that should normally be borne by the entities concerned in the course of their business, and should therefore be considered as operating aid. According to the Commission practice, such aid cannot be considered compatible with the internal market in that it does not facilitate the development of certain activities or of certain economic areas, nor are the incentives in question limited in time, digressive or proportionate to what is necessary to remedy to a specific economic handicap of the areas concerned.

Possible fines, which could run in the billions of euros, would be on Apple. So, unlike what some of our readers vehemently claimed - "There is no possibility of a fine upon Apple whatsoever" - Apple could very well end up paying billions of euros.

The Commission wishes to remind Ireland that Article 108(3) of the Treaty on the Functioning of the European Union has suspensory effect, and would draw your attention to Article 14 of Council Regulation (EC) No 659/199935, which provides that all unlawful aid may be recovered from the recipient.

This is only the beginning. Several other companies and countries - Google, Starbucks, The Netherlands, Luxembourg - are also under investigation, and will likely face similar proceedings in the near future.

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Member since:

but don't forget the likes of Adobe and Microsoft also have nice little deals with the Dublin Government.

Yes, and if they too has colluded with the Irish government to receive illegal subsidies, they too should be forced to pay back and they too should be publicly called out.

This is not a Apple-vs-Microsoft-vs-Google-vs-Adobe thing.

This is EU taxpayers vs an Irish and Big Business conspiracy.

Reply Parent Score: 8

Wondercool Member since:

Disclosure: I live in Ireland.

First of all: I fully agree that this seems illegal.

Let's get that out of the way, but I would like to put things a bit in perspective.
I think there is a bit of misconception here. The EU didn't attack the 12.5 percent corporate tax rate here but the fact that Apple got individual preferential rates. And it certainly is not a subsidy from the Irish government.

Also I don't think this has much to do with European taxpayers. If all countries in Europe would have the same corporate tax rate, more tax would come in for sure overall, but it still doesn't mean that (in this case) Apple money would go to other EU countries except for the fact that Apple might relocate to another EU country.

Also the fact that in the 90's Ireland got EU money is as far as I know true. But this was by design. Ireland in the early 90s was one of the poorest countries in Europe. Ireland hadn't/hasn't natural resources or a favourable location. Partly because of the low cost wages, partly because of the subsidies, partly because of the low tax regime, partly because of the relatively highly educated people, Ireland dug itself out of the bog (and went the other way). It's hard to imagine but until 2007 there was only 1 dual carriage motorway in Ireland (between Dublin and Belfast). You could argue the subsidy worked. Note that afaik, no more nett EU money goes to Ireland.

So while I agree that it seems that the EU has a case, it is not because of low tax or subsidy. It is because Ireland is favouring one above others.

If people in other countries want to stop the Double Irish, I understand (note that for American companies the USA could easily change the rules too that make the Bermuda construction impossible, why are they not doing this? Same reason as Ireland!). But then I think we should also stop the Dutch Sandwich and tax havens like Luxembourg, Switzerland, Cayman Islands, Jersey, Monaco, etc, etc.

Edited 2014-09-30 12:52 UTC

Reply Parent Score: 6

unclefester Member since:

Ireland takes EU money (mainly agricultural subsidies) and bribes foreign companies to set up in Ireland. Ireland have been operating this scam for decades. Without the EU subsidies Ireland would resemble Romania or Bulgaria.

Reply Parent Score: 4