By: Mike Lane & Isabel Taylor (Slaughter & May)
The victory for Apple and Ireland in their €13bn State aid dispute with the European Commission raises the question how a multinational group like Apple should be taxed in a modern, digital world. Here we consider the implications of the decision for other such tax State aid cases.
Yesterday, the General Court of the European Union released its much anticipated decision in Apple Sales International (ASI) and Apple Operations Europe (AOE) v Commission. In short, Apple and Ireland won, the Commission lost, although an appeal to the Court of Justice of the European Union seems inevitable.
It is difficult to think of a tax dispute that has captured the headlines, and the attention of the world’s media, more than this case.
Why? It’s not just that the headline numbers are eye-watering – €13bn of tax plus interest. It’s not just that it introduced the wider world to the often byzantine world of multinational tax planning – ‘double Irish arrangement’ now has its own lengthy Wikipedia entry. It’s because it is seen as raising the (very) hot topic of how a multinational group like Apple should be taxed in a modern, digital world. Ireland did not believe it was owed the tax, the US weighed in because it thought the profits were its to tax in its own good time and the Commission thought Ireland, or possibly Ireland and the EU countries in which the sales giving rise to the profits were made, should tax the profits now and that for Ireland to agree not to do so for Apple was illegal State aid…
