The European Commission has ruled that two tax rulings issued by the Irish tax administration “gave illegal tax benefits to Apple”*, representing illegal state aid under EU law. An estimated 13 billion euros are owing in taxes from Apple.
In its immediate response, GATJ member the European Network on Debt and Development (Eurodad) expresses how “the European Commission has exposed one rotten apple, but we fear there are many more out there (…), the approach is still addressing the symptoms but failing to treat the disease.” Eurodad notes that the essence of the case is two Advance Pricing Agreements (APAs) which Ireland granted Apple – one from 1991 and one from 2007. These types of APAs, or “Sweetheart deals,” were also at the core of the LuxLeaks scandal. “One thing worth noticing is that the latest data available suggests that the number of APAs in the EU is actually increasing rapidly at the moment”, as shown in this February 2016 Eurodad article: Sweetheart taxdeals trending in the EU.
As GATJ Coordinating Committee member Tove Maria Ryding points out, “absurdly, deeply indebted Ireland” announced it would appeal the ruling to the European Court of Justice, “refusing to collect billions of much-needed Euros from Apple” – just as Luxembourg and Netherlands did with Fiat and Starbucks ( cases are still pending.)
GATJ’s committed partner the Tax Justice Network wonders whether the European Commission’s Apple decision “has signalled the beginning of the end of tax wars?”, as you can read in their press release.
Clark Gascoigne’s blog post from Financial Accountability and Corporate Transparency Coalition (FACT) puts the Apple tax ruling into a US context: “Today, the European Union (E.U.) signalled that it is engaged in a serious conversation and is willing to take steps to address aggressive tax avoidance and tax haven countries that facilitate the problem. Unfortunately, the U.S. Administration and Congress have been less willing to do the same”.
*The EC case document, which describes the content of the case, can be found here