Irish Finance Minister Elaborates on Apple Case

On October 4, Irish Minister for Finance Michael Noonan published an opening statement to the Irish Senate regarding the European Commission’s decision that Ireland provided unlawful state aid to Apple. The minister provides wide background information and elaborates on the flaws in the Commission's argumentation.


On August 30, the European Commission concluded that Ireland gave Apple illegal tax benefits of €13 billion between the years of 2003 to 2014. The Irish government has been ordered to recover the funds plus interest. Minister Noonan said that Irish Government profoundly disagrees with the Commission's analysis in the Apple investigation and will challenge the decision before the European Courts.

Taxed where the Value Is Created

Minister Noonan pointed out that everyone knows that the iPhone and other well-known Apple products were developed in the US and not in Ireland. He said that a central aspect of this case is that the companies concerned were not tax resident in Ireland and under Irish tax law, non-resident companies are chargeable to Irish corporation tax only on the profits attributable to their Irish branches. "This means that profits of such companies that are not generated by their Irish branches cannot be charged with Irish tax under Irish tax law. Examples include profits from technology, design and marketing that are generated outside Ireland," he said.

Extending Competition Rules into the Tax Area

Michael Noonan warned that the Commission's decision encroaches on Member State sovereignty in the area of tax as it extends competition rules into the tax area to an "unprecedented and unjustified extent."  As a result, the Commission creates uncertainty for business and investment in the European economy, "both in its novel interpretation of longstanding rules and their unfair retroactive application."

Damaging Ireland's Reputation

The Minister expressed concerns that the Commission’s decision is damaging for the country's reputation to be called into question. He said it can affect how Ireland will be treated by other jurisdictions and "damages Ireland’s credibility in the international tax debate and inhibits Ireland in pressing arguments that serve our national interest."

Sources: Irish Department of Finance

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