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Apple state aid case: a win-win for Ireland
I am finding it difficult to get my head around the Apple state aid case (Commission v Ireland and Others) [2024] EUECJ C-465/20P (10 September 2024).
First, just consider the sheer amount of money involved – some €13bn including interest. That is equivalent to something like 10% of the total annual tax receipts of the Irish government.
Equally astonishing in my view is the fact that the ruling seems to have had a minimal effect on the Apple share price, although the reality is that the bulk of the money has been sitting in an escrow since 2016.
But what is really interesting to me, an admitted non-expert in international tax matters, is that Ireland’s ‘punishment’ for allowing Apple to benefit from this unauthorised state aid is that it will now receive a huge additional sum by way of tax revenues. It appears, in my view at least, that this will be a rare case of having your cake and eating it.
The Irish economy boomed, largely as a result of the many fiscal incentives (not just the one in dispute here) offered by the government and now it will be getting a tax refund. I know that things are much more complex than this simple analysis, but, however you look at it, it does seem an odd result.
I loved the statement put out by the Irish government after the decision was announced: ‘Ireland will of course respect the findings of the court regarding the tax due in this case. The government will need to carefully consider what is the best course of action to take with this revenue.’ Our chancellor Rachel Reeves could only dream about having to deal with that sort of problem.
If you do one thing…
See the latest HMRC guidance on the top-up taxes.
