EU Commission to Drop Infringement Proceedings in Ireland-Apple State Aid Decision

EU Commission to Drop Infringement Proceedings in Ireland-Apple State Aid Decision

The EU Commission is now to withdraw infringement proceedings against Ireland as the Government has now completed full recovery of the alleged State aid from Apple.

In August 2016, the Commission concluded that Ireland’s tax benefits to Apple were illegal under EU State aid rules because it allowed Apple to pay substantially less tax than other businesses. The Commission asked Ireland to recover up to EUR13bn in illegal State aid from Apple.

Ireland maintained that it disagreed with the Commission’s analysis and preferred an appeal before the General Court of the European Union, asking it to annul the Commission’s decision.

“Ireland did not give favorable tax treatment to Apple – the full amount of tax was paid in this case and no State aid was provided.  Ireland does not do deals with taxpayers,” Ireland’s Department of Finance had then said.

The Commission subsequently, in October 2017, announced the intention to launch infringement proceedings against Ireland for failing to recover from Apple the illegal State aid pursuant to the Commission’s decision.

However, in a press release issued on September 18, Ireland’s Finance Minister, Paschal Donohoe, confirmed that Apple has deposited EUR14.3bn into the Escrow Fund which represents the full recovery of the alleged State aid.

Ireland is hoping that the Commission would withdraw the infringement proceedings against Ireland now that the recovery of the alleged State aid has been effected.

The Finance Minister commented: “While the Government fundamentally disagrees with the Commission’s analysis in the Apple State aid decision and is seeking an annulment of that decision in the European Courts, as committed members of the European Union, we have always confirmed that we would recover the alleged State aid. We have demonstrated this with the recovery of the alleged State aid which will be held in the Escrow Fund pending the outcome of the appeal process before the European Courts.”

“This is the largest State aid recovery at EUR14.3bn and one of the largest funds of its kind to be established. It has taken time to establish the infrastructure and legal framework around the Escrow Fund but this was essential to protect the interests of all parties to the agreement.”