Following a state aid investigation launched in June 2014, the European Commission has concluded that two tax rulings issued by Ireland to Apple have substantially and artificially lowered the tax paid by Apple in Ireland since 1991.

According to the Commission, the rulings endorsed a way to establish the taxable profits for two Irish incorporated companies of the Apple group, which did not correspond to economic reality and as a result, Apple only paid an effective corporate tax rate that declined from 1% in 2003 to 0.005% in 2014 on the profits of Apple Sales International. The Commission says that the selective tax treatment of Apple in Ireland is illegal under EU state aid rules because it gives Apple a significant advantage over other businesses that are subject to the same national taxation rules. The Commission can order recovery of illegal state aid for a ten-year period preceding the Commission’s first request for information in 2013. Ireland must now recover the unpaid taxes in Ireland from Apple for the years 2003 to 2014 of up to €13 billion, plus interest.

The Commission’s press release states that its decision on the Apple issue does not call into question Ireland’s general tax system or its corporate tax rate.

The Irish Government has stated that it will appeal the decision of the European Commission and Apple has also announced its intention to appeal.

Institute President Liam Lynch issued a statement in response to the Commission announcement stressing the importance of appealing the ruling. A Government decision to do so has now been taken. The full detailed ruling has not yet been issued, and the timing of its publication is subject to the Commission and Apple agreeing a version of the document which excludes commercially sensitive information.