The European Commission’s state aid decision against Apple and Ireland could have consequences for other multinational companies

In a highly politically charged decision, the European Commission has decided that Ireland granted Apple illegal state aid amounting to €13 billion as a result of selective tax treatment.

It is believed that the Commission is currently reviewing more than a thousand similar types of tax rulings, involving other EU member states and companies, as part of its ongoing investigation into their granting of favourable tax treatment. The Apple decision therefore could have significant consequences for other multinational companies which allocate profits to low cost jurisdictions.

It is not the first time the Commission has used its state aid powers to act against an EU country’s alleged favourable taxation treatment towards multinational companies. However, the sheer size of the repayment ordered in this case, the potential consequences for Ireland’s low business taxation economy and the political tension with the US Government has placed the Apple decision in a league of its own.

Since the Commission passed its decision, the Irish Government has confirmed that it will appeal to the European Court of Justice against the Commission’s decision.

The full version of this article first appeared in Governance and Compliance, please follow this link to read the full version.