European Commission takes Ireland to court over Apple tax bill

Ireland has appealed the August 2016 decision

European Commission takes Ireland to court over Apple tax bill

File photo

Updated: 11.40

The European Commission is taking Ireland to the European Court of Justice for failing to recover up to €13bn from tech giant Apple.

The commission concluded in August 2016 that Ireland's tax benefits to Apple were illegal under EU state aid rules.

It said this was because it allowed Apple to pay substantially less tax than other businesses.

It required that illegal aid be recovered - something that the European Commission says has not been done.

Commissioner Margrethe Vestager, in charge of competition policy, said: "Ireland has to recover up to €13bn in illegal State aid from Apple.

"However, more than one year after the commission adopted this decision, Ireland has still not recovered the money, also not in part. We of course understand that recovery in certain cases may be more complex than in others, and we are always ready to assist.

Commissioner Margrethe Vestager | Image: European Commission

"But member states need to make sufficient progress to restore competition. That is why we have today decided to refer Ireland to the EU Court for failing to implement our decision."

The deadline for Ireland to implement the decision January 3rd 2017.

The commission says although Ireland has made progress on the calculation of the exact amount of the illegal aid granted to Apple, "it is only planning to conclude this work by March 2018 at the earliest."

Ireland has appealed the August 2016 decision to the Court of Justice.

But the commission says such actions "do not suspend a member state's obligation to recover illegal aid".

However it can place the amount in an escrow account, pending the outcome of the EU court procedures.

Government 'extremely disappointed'

In response, the Department of Finance said: "Ireland has never accepted the commission’s analysis in the Apple state aid decision.

"However, we have always been clear that the Government is fully committed to ensuring that recovery of the alleged Apple state aid takes place without delay and has committed significant resources to ensuring this is achieved.

"Ireland fully respects the rule of law in the European Union.

"That is why it is extremely disappointing that the commission has taken action at this time against Ireland."

"Irish officials and experts have been engaged in intensive work to ensure that the State complies with all its recovery obligations as soon as possible, and have been in constant contact with the European Commission and Apple on all aspects of this process for over a year.

"It is extremely regrettable that the commission has taken this action, especially in relation to a case with such a large scale recovery amount.

"Ireland has made significant progress on this complex issue and is close to the establishment of an escrow fund, in compliance with all relevant Irish constitutional and European Union law.

"The work on the establishment of the escrow fund to deal with the unprecedented recovery amount will continue, notwithstanding the fact that commission has taken this wholly unnecessary step."