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Whether or Not to Bite the Apple: Some Implications of the August 2016 Commission Decision on Irish Tax Benefits for Apple

DOI https://doi.org/10.21552/estal/2017/2/8

Eugene Stuart


Every State aid regulatory decision in the EU has political, economic and administrative dimensions in addition to the application of legal rules and principles. The Apple Decision of August 2016, imposing a record recovery order against Ireland, is no exception. In the context of the use of the EU State aid rules to promote fair tax competition, and contribute indirectly to failed tax harmonisation, this article looks in detail at the Apple Decision together with its implications in the context of EU State aid and taxation policy and some of the sensitive political repercussions arising from the Decision. State aid in the EU via tax measures continues to represent about one-third of all State aid. Accordingly, it is also topical and useful to explore the logic and motivation of the European Commission in treating tax measures as liable to give rise to State aid concerns (and as priority and major cases) in the context of the Apple Decision and the soft law measures, Commission decisions and case law which preceded it. The case is currently on appeal and, although the Irish arguments do not seem strong at first sight, on several points the position of the Apple entities and of the Irish tax authorities will need to be analysed in detail by the Court in response to the Irish arguments and there is likely to be some scope for certain Commission positions in the case to be over-turned on points of fact, if further proven in the appeal. In reviewing the Apple Decision, the EU Courts will soon have an important (or even historic) opportunity to decide whether or not to further support the legality of the Commission’s continuing expansion of its State aid remit in regard to allegedly unfair tax measures.
Keywords: Tax Rulings; Unfair Tax Competition; Tax Harmonisation; Arm’s Length Principle; Record State Aid Recovery.

Dr Eugene Stuart is an international legal and policy advisor specialising in the development of State aid regulatory systems in non-EU countries. Previously, he was Head of the State Aid Department of the Irish Ministry of Economy and an advisor on EU State aid reforms in the late 1990s. He is currently based in Kiev and working with an EU funded Project on the development of the Ukrainian State aid regulatory system. The views expressed here are those of the author and are not to be understood as in any way reflecting an official opinion of the European Union or any of its constituent or connected organisations. DOI: 10.21552/estal/2017/2/8

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