“The EU General Court sided with Apple, saying the European Commission failed to show Ireland’s tax arrangements with the company were illegal state aid”. The EU Treaty makes tax policy an exclusive national competence. /1 bloomberg.com/news/articles/…
The Commission has tried for years to fight tax-shifting by countries that have too low tax rates by using the accusation that they are subsidising firms/activities in terms that violate the competition law state aid rules. It has been a diffilcut and mostly failing method /2
This decision does not bode well for the new iniciatives in the same direction that are being prepared by the Commission ft.com/content/4068b8… .The plan is to use Article 116 of the EU’s Treaty to declare national tax schemes as distortions of the single market. They are, but/2
The shifting-four countries, shamefully will veto any new initiative. The Irish Finance Minister(President of the Eurogroup) welcomed the decision(despite implying that Ireland will not receive €13 billion from Apple now)because it underpins the country’s business model../3
Promoting legal tax evasion to the detriment of other member countries should be strictly restricted in a single market. But “Zucman et al show that Ireland gains some EUR 100bn a year in shifted corporate tax..while Germany and France lose some EUR 50bn a year”.A Treaty mistake
Besides the precedent created by this decision, Comission initiatives to use Article 16 to fight too low divergent taxation were in any case made difficult, or even impossible, because the Treaty rule implies that unanimity would be required and, in this case, quite unlikely /end
