EU Commission Publishes The Apple Case Decision

; posted on
December 20th, 2016

The EU Commission has published the non-confidential version of the final negative decision adopted on 30 August 2016 concluding that Ireland gave illegal tax benefits to Apple, worth up to €13 billion. 


On August 30, the European Commission has concluded that Ireland gave Apple illegal tax benefits of €13 billion between the years of 2003 to 2014. The Commission informed that the deal between Apple and Ireland allowed the company to pay a tax rate of only 1% on its European profits in 2003, with that figure sliding to as little as 0.005% by 2014.

Apple Companies Described as "stateless"

One of the main premises of the Commission's decision is that Apple Group companies, in particular Apple Sales International (ASI) and Apple Operations Europe (AOE), are incorporated in Ireland, but were not tax resident in Ireland nor in any other tax jurisdiction during that period. Their activities in other jurisdictions and in particular the activities of their head offices, which lacked any physical presence and employees, did not give rise to a taxable presence in the US or any other jurisdiction. ASI and AOE could therefore be best described as “stateless” for tax residency purposes.

Congested Tax Rulings

The Commission points out two contested tax rulings issued by the Irish Revenue in favor of ASI and AOE, which endorse methods for ASI and AOE to allocate profit to their respective Irish branches. The contested tax rulings allow ASI and AOE to determine their yearly corporation tax liability in Ireland by applying the profit allocation methods endorsed by the Irish Revenue in those rulings. According to that ruling, the net profit to be allocated to ASI’s Irish branch would be calculated as equal to [10-15] % on branch operating costs, excluding costs such as charges from Apple affiliates and material costs. For further insights, see the report.

Source: Commission Decision (pdf)

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