The Apple Appeals

We now have summaries of the appeals to be made by Ireland (published in December) and Apple (published yesterday) in the state-aid case.  Ireland set forward 9 grounds while Apple include 14.

On the facts of the case Ireland argue:

The decision also mischaracterizes the activities and responsibilities of the Irish branches of ASI and AOE. These branches carried out routine functions, but all important decisions within ASI and AOE were made in the USA, and the profits deriving from these decisions were not properly attributable to the Irish branches of ASI and AOE.

With Apple’s position being:

The Commission made fundamental errors by failing to recognise that the applicants’ profit-driving activities, in particular the development and commercialisation of intellectual property (‘Apple IP’), were controlled and managed in the United States. The profits from those activities were attributable to the United States, not Ireland.

The readers can identify the difference.  The case continues to attract significant attention and there were two recent opinion pieces in The Irish Times from Liza Lovdahl-Gormsen and Paul Sweeney on the topic.

Apple Cash Tax Paid

Finally, here is a piece worth reading from Martin O’Malloney in the Dublin Review of Books.

The Apple Ruling: What do we know?

It’s just over a week since Commissioner Vestager announced the state-aid ruling on the tax treatment of Apple in Ireland.  We only have the press release and the Commissioner’s statement to go by so it’s still too early to be definitive on what the Commission are actually doing.  It could be months before the full ruling is available here but that doesn’t mean we can’t have a stab at what might be going on.

There has been a lot of reaction to what the ruling means for Ireland’s Corporation Tax regime.  While there has been massive reputational damage (possibly irreparably so) the ruling does not have any implications for Ireland’s Corporation Tax rate or even for any of the rules that Ireland applies to Corporation Tax.

Unlike previous instances the Commission is not looking for any change in Ireland’s Corporation Tax regime.  In this instance looking for changes would likely have been overreach but that is not what the Commission is seeking.  Nor is the Commission seeking to retrospectively impose alternative transfer pricing standards which was a central focus of the recent White Paper from the US Treasury.  If the Commission’s case required a change of rules or the application of new standards it would have had little hope of standing up to an appeal.

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