Sunday 24 July 2016

EU Commission set 'to find Apple deal was illegal'

Yuya Shino

Published 29/09/2014 | 02:30

Apple is to be accused of benefitting from State aid here.
Apple is to be accused of benefitting from State aid here.

The European Commission will accuse Apple of benefiting from illegal state aid here, based on preliminary findings of an investigation into tax deals.

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The commission is expected to publish its opening decision in the Apple case today, explaining why it reached the preliminary view that two tax deals agreed between the US company and the Irish government-in 1991 and 2007-amounted to illegal state aid, according to a report in the 'Wall Street Journal'.

Apple will then have 30 days to respond to the EU's decision, according to people familiar with the matter.

It is adamant  that its agreements with Ireland did not break any laws. “There’s never been any special deal, there’s never been anything that would be construed as state aid,” Luca Maestri, Apple’s chief financial officer, told the Financial Times today.

Last week the Irish Independent reported that the commission would publish the parameters of its probe today, highlighting concerns that the State's tax dealings with Apple could be found to have breached EU rules.

The commission announced the investigation in June following which the Irish government said it was confident that it has not breached state aid rules and will defend its position vigorously.

Apple has also said it received no special consideration from Irish officials.

Mr Maestri called the investigation “very unfortunate” in an interview with the Financial Times.

He denied that the world’s most valuable company had agreed any “quid pro quo” to bring more jobs to Ireland in exchange for preferential tax treatment of its local subsidiaries.

Details of the probe, which may come out later this week, could leave the multinational facing billions of euro in fines.

Preliminary investigations by the European Commission into Apple's tax deals here claim the company benefited from illicit state aid after striking illegal deals with Irish authorities, according to reports.

The publication will be followed by a consultation period for interested parties to submit their views.

The European Commission, the European Union's competition authority, is also investigating corporate tax deals in the Netherlands, Luxembourg, as well as Ireland, following revelations about the tax-planning practices of major corporations such as Apple, Google and Starbucks.

A US Senate committee investigation revealed last year that Apple had cut billions from its tax bill by declaring companies registered in Cork as not tax resident in any country.

Ireland, the Netherlands and Luxembourg all have specially structured corporate tax arrangements, but so do other EU member states.

In the majority of member states, the effective corporate tax rate is nearly always lower than the nominal rate, which is usually the result of "sweeteners" in the tax code.

Irish Independent

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