An Apple A Day Keeps Taxation Away?

The General Court (GC) of the European Union ruled in favour of Apple in the state aid case regarding Apple's Irish tax structure, annulling the 2016 decision of the European Commission (EC). As a result, Ireland is at present not obliged to reclaim the amount of EUR 13 billion from Apple. The decision is not yet final due to the EC's right to appeal.

Background

In 1991 and 2007 the Irish tax authorities issued two tax rulings (being essentially advance rulings on the application of tax regulations in an individual case) in favour of two Apple companies which were incorporated but not tax resident in Ireland. The contested tax rulings endorsed the methods used by these companies to determine their taxable profits in Ireland relating to the trading activity of their respective branches. As a result, the annual profits of one of these Irish companies was taxed in Ireland at an effective tax rate as low as 0.005 % in 2014.