The EC announced it would be starting an investigation in 2014 to look at Ireland’s selective tax treatment of conglomerates and providing illegal state aid to jurisdictions that has facilitated such loop hole. Similar investigations are taking place looking at Starbucks’ relationship with the Netherlands, and Fiat’s deal with Luxembourg.
The EC can order recovery of illegal state aid dating back to longer than a decade before its first request for information in 2013. Therefore it has told the Irish government to recover the unpaid taxes from Apple from 2003 to 2014; amounting to 13 billion euros plus interest.
The EC’s decision is likely to be appealed both by Apple and by the Irish government, so the case could continue for several more years. In the meantime, the EC has indicated it will request Apple to pay the disputed amount to a regulated account pending the outcome of the appeal.
A Commissioner in charge of competition policy issued a statement: the deal with Ireland allowed Apple to avoid tax on almost all profits generated by the sale of Apple products in the entire EU Single Market causing great loss to the economy, this case will help rectify the deficit and finally close the Irish loophole.