The EC published its final decision on a recent state aid investigation.
The decision concerns transfer pricing rulings granted by Ireland to the Apple group. Although the decision was announced on August 30, 2016, publication was deferred in order to allow any confidentiality issues to be resolved, as is normal in such proceedings. The decision confirms the outcome of the EC's preliminary 2014 decision-that the transfer pricing rulings in question constituted illegal state aid. The state aid-estimated by the EC in its August 2016 announcement at up to €13 billion-must be recovered (with interest) by the Irish authorities from the multinational group.
The final decision includes comments from Apple and Ireland. The comments include challenges to the EC's legal and technical analysis, such as the interpretation of the state aid concepts of "advantage" and "selectivity".
The decision is understood to have been appealed to the general court of the CJEU by the taxpayer and by Ireland. The appeal does not suspend the recovery payment. The appeal, including possible subsequent appeals, could take years.
On August 30, 2016, and following an in-depth state aid investigation that began in June 2014, the EC decided that two tax rulings issued by Ireland "substantially and artificially" lowered the tax paid by Apple's Irish companies in Ireland since 1991. The EC concluded that the rulings endorsed a way to establish the taxable profits for two Irish incorporated companies of the multinational group that "did not correspond to economic reality: almost all sales profits recorded by the two companies were internally attributed to a 'head office'." The EC found that:
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