The European Commission's decision on Apple's tax arrangements in Ireland caused a seismic shock in the business and tax worlds and raises questions about the EU’s motives, says Heather Self, partner at Pinsent Masons
From a business perspective, the sheer size of the proposed €13bn (£10.8bn) bill, the largest ever tax settlement, and more than twice Ireland's annual corporation tax revenues, was the main issue. But for tax specialists, the deeper question is what is the EU trying to do?
It started with a press release from the EU Commission in June 2014, announcing investigations into transfer pricing arrangements of Apple, Starbucks and Fiat. Since then, McDonalds and Amazon have been drawn into the net, and the commission has hinted that it is looking at many other potential cases, having requested copies of tax rulings from all EU Member States. The key question is whether the tax rulings could constitute State aid: the giving of a selective advantage to companies, in a way which could distort the functioning of the single market.
