Summary about the Apple company
Introduction
The Commission considered that the reference system was the ordinary regime for imposition of the benefits of companies within the framework of the Irish System of the Corporation Tax, which was intended to tax the benefits of all companies subject to the tax in Ireland. In the light of this objective, the Commission considered that integrated and unintegrated independent companies were in a comparable legal and factual situation. Section 25 of the Fiscal Consolidation Law of 1997 must therefore be considered an integral part of the reference system and not a separate reference system.
Regarding the principle of equal conditions, the Commission indicated that, according to the drafting of article 25 TCA 97, and given its purpose, this provision should be applied in relation to a method of assigning benefits. In this regard, remember that article 107.1, of the TFUE requires that the method of assigning the benefits be based on the principle of full competence, regardless of the fact that the Member State in question has incorporated the principle of full competence into its national legal system.
Developing
The commission based on that examination on two premises. First, he pointed out that any fiscal measure adopted by a Member State must comply with the rules on state aid. Second, he claimed that from the judgment of June 22, 2006, Belgium and Forum it follows that a reduction in the taxable base resulting from a fiscal measure that allows a taxpayer to use transfer prices in intragroup operations that do not resembleAt the prices that would be applied in conditions of free competition, it confers a selective advantage to said passive subject for the purposes of article 107, section 1, of the TFUE.
Thus, the Commission argued, based on the Forum Judgment, that the principle of full competence constituted a reference to determine if an integrated company enjoyed a selective advantage for the purposes of article 107.1, of the TFUE as a consequence of a fiscal measure that determines its transfer prices and, therefore, its tax base.
This principle aims to ensure that intragroup operations receive, for fiscal purposes, the same treatment as those carried out between unintegrated independent societies, in order to avoid unequal treatment between societies that are in a situation of fact and similar law, given the objective of these standards, which is to tax the benefits of all societies that enter their scope of application.
As regards the orientations prepared within the framework of the OECD, the Commission declared that they were only useful for tax authorities, in order to ensure that the benefit and transfer prices agreements produce results according to the conditions according to the conditions with the conditionsFrom the market.
Another controversies was the selective advantage due to the fact that the benefits derived from the intellectual property licenses of ASI and AOE are not assigned to the Irish branches. As for this, the commission argued that the fact that the Irish tax authorities accepted, in the contested tax resolutions, the premise that Apple’s Pi licenses held by this and AOE should be assigned outside Ireland, had given riseto an annual taxable benefit to like this and AOE in Ireland that departed from a reliable approach to a market based on the market according to the principle of full competition.
In essence, the commission criticized the Irish authorities for erroneously assigning active, functions and risks to the central headquarters of ASI and AOE, although the Irish authorities the central offices had no physical presence or employees. In particular, as regards the functions related to intellectual property licenses, the commission alleged that such functions could not have been performed solely by the advice of ASO and AOE, without personnel, as evidenced by the fact ofthat in the minutes of the meetings of the Board of Councils provided to the Commission, there was no reference to any debate or decision in this regard.
Therefore, according to the commission, since the central headquarters of ASI and AOE had not been in a position to control or manage Apple’s IP licenses, these central headquarters should not have been assigned, in conditions of equality, to the derived benefitsof these licenses. Therefore, these benefits should have been assigned to the branches of LO and AOE, which are the only ones that are effectively performing the functions related to the intellectual property of Apple that are crucial for the commercial activity of LIO and AOE.
Therefore, by not assigning to the branches of ASI and AOE.1 of the TFUE, in the form of a reduction of its respective annual taxation. According to the commission, this advantage was of a selective nature, since it translated into a reduction in the fiscal burden of AS and AOE in Ireland compared to unintegrated companies whose taxable benefits reflected certain prices in the market negotiated in full conditionscompetition.
Regarding selective advantage as a consequence of the inadequate election of the methods of assigning benefits to the Irish branches of ASI and AOE, the commission argued that, even if the Irish tax authorities had rightly accepted the presumption that the licenses of Pi de Pi de Pi de Pi de Pi de Pi de Pi de Pi de PiApple held by LO and AOE should be assigned outside of Ireland, the methods of assigning benefits approved by the contested tax sentences continued to lead to an annual tax benefit to and AOE in Ireland that departed from a reliable approach to a result based on a result basedIn the market, in accordance with the Principle of Free Competition. According to the commission, these methods are based, in any case, on inappropriate methodological options.
Specifically, the Commission questioned, first of all, the choice of Irish branches of ASI and AOE as the center of the benefit allocation method and, secondly, the choice of the indicators of the level of benefits and the too low level ofAccepted yield for like and AOE branches. The Commission concluded that these benefits allocation methods had reduced the fiscal burden of LIO and AOE in accordance with the ordinary norms of imposition of business benefits in Ireland compared to unintegrated companies whose taxable benefit in accordance withThis system is determined by the prices negotiated in the market in market conditions. Therefore, according to the commission, the fiscal resolutions, when approved these methods, conferred a selective advantage to this and AOE for the purpose of article 107.1, from Tfue.
Regarding the selective advantage due to an exception to the reference system by the contested tax resolutions, which do not conform to the principle of full competition, the commission argued that, even when article 25 TCA 97 was considered only the reference system constitutedAdequate, the contested fiscal resolutions confer ‘and AOE a selective advantage in the form of reducing its taxable base in Ireland. First, the Commission claimed that the application of article 25 TCA 97 in Ireland was based on the principle of full competence to ensure that all integrated non -resident companies received the same treatment by virtue of said provision, as can be seen from several sentencesdictated during the period of validity of the contested tax sentences. In the present case, the Commission demonstrated that the contested tax resolutions departed from a reliable approach to a market based on the market according to the principle of full competition, which conferred an economic advantage to thus and AOE compared to other companies subject to theTax in Ireland.
Secondly, and in any case, the commission argued that, even assuming that the application of article 25 TCA 97 was not based on the principle of full competence, the contested tax resolutions should remain considered as dictated by the Irish tax authorities onThe basis of its discretionary faculty, in the absence of objective criteria related to the Irish fiscal system, so they conferred a selective advantage to like this and AOE.
conclusion
In conclusion to the controversy that it presented if it was a selective measure, the commission considered that the contested tax sentences gave rise to a reduction in the charges that should normally have supported this way and AOE in the course of their commercial activities and that, therefore, it should be considered that they had granted functioning aid to these two companies. However, he claimed that, to the extent that this way and AOE were part of the Apple multinational group and that this group should be considered as an economic unit in the sense of jurisprudence, the group as a whole had benefited from the state help of stategranted by Ireland by virtue of the contested tax resolutions. The Commission observed that these aid measures were incompatible with the internal market under article 107, section 3, letter c), of the TFU.3 of the TFUE.
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