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Wide support for Commission’s state aid verdict on Ireland’s tax deal with Apple

Competition Commissioner Margrethe Vestager won wide support from MEPs, in a Wednesday afternoon debate, for the Commission’s state aid verdict that the tax benefits that Ireland granted to Apple Inc., enabling it to pay substantially less tax than other businesses over many years, were illegal.

Some MEPs criticised Apple and Irelands’ plans to appeal against the decision that Ireland must recover €13 billlion in unpaid taxes and interest. Ms Vestager acknowledged that they have a right to appeal. “But we have taken a robust decision and we will defend it in court”, she said.

Ms Vestager called for more transparency on the basic data of multinational companies. Such information should become public, she said, referring to the Commission’s recent proposal for public country-by-country reporting of staff numbers, profits made and taxes paid.

Background

The Commission calculated that the selective treatment by the Irish tax authorities allowed Apple to pay an effective corporate tax rate of 1% on its European profits in 2003, falling to 0.005 per cent in 2014.

This is illegal under EU state aid rules, because it gives Apple a significant advantage over other businesses that are subject to the same national tax rules.

The Commission decided that Ireland must now recover the taxes unpaid by Apple in Ireland for 2003 to 2014, totalling up to €13 billion, plus interest. Ireland is challenging this decision.

Parliament’s special committee on ”tax ruling” deals, set up in response to the November 2014 “LuxLeaks”, revelations, delivered a long list of recommendations to make corporate taxation in Europe fairer and more transparent. 

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