Ireland expects the European Commission’s decision soon on whether favorable Irish transfer pricing rulings granted to U.S. technology giant Apple violated European Union (EU) state aid rules.
“We are expecting adjudication on Apple maybe in the next few weeks but certainly between now and Christmas,” Irish Finance Minister Michael Noonan told reporters on his way to a meeting of the European Union finance ministers.
The commission has been investigating the tax ruling practices of EU states since 2013. On June 11, 2014, the commission opened formal state aid investigations in three cases: Apple in Ireland, the Fiat Finance & Trade unit of Fiat Chrysler in Luxembourg, and Starbucks in the Netherlands.
Status of the Apple case
The panel has decided that Luxembourg and the Netherlands granted the Fiat unit and Starbucks illegal aid and ordered the two countries to recover between $21 million (€20 million) and $32 million (€30 million) in taxes from each company.
In its fourth quarter financial statements, Apple noted that its effective tax rates “could be affected by . . . changes in tax laws or their interpretation, including in . . . Ireland.” The computer giant stated that “if the European Commission were to conclude against Ireland, it could require Ireland to recover from the company past taxes covering a period of up to 10 years reflective of the disallowed state aid, and such amount could be material.”
In an interview with Irish national broadcaster RTE, Apple CEO Tim Cook was asked if the company intends to scale back in Ireland in the event that the company receives an adverse ruling from the commission. Citing the company’s decision to add 1,000 new jobs in Ireland by mid-2017, he responded, “We’re all in.”
Apple will appeal an adverse ruling
“If there is an adverse ruling, we’re going to appeal, Ireland is going to appeal and we’re going to support them because there was no special deal, no special arrangement,” Cook said. “I can’t say for sure what they’ll come back with, but what I do know for sure is if the evidence is viewed on a fair basis, I believe strongly that it will be found that there is nothing wrong done.”