EU sues Ireland over €13bn Apple payment

In a clear sign that the EU is willing to crack the whip to enforce compliance with its decrees, competition commissioner Margrethe Vestager has announced that the EU will sue Ireland in the European Court of Justice (ECJ) to force it to speed up recovery of €13bn from Apple that she ruled, in an August 2016 decision, amounted to illegal state aid.

The EU has decided to take Ireland to court, Ms Vestager said, because the county’s authorities had failed to recover any of the total due, despite having a window of four months in which to do so.

Irish officials for their part were clearly annoyed by Ms Vestager’s latest decision, noting that the country respects the rule of law and “has committed significant resources to ensuring this is achieved”. 

Because both Apple and Ireland have appealed the original decision, the €13bn Apple allegedly owes will not go to Ireland’s Treasury, but into a bespoke escrow fund until the ECJ makes a ruling. The government argues setting up a fund of this size and complexity has taken time, while a search for a custodian is under way. “The scale of the recovery in this case is unique within Europe – the largest amount recovered before this case is €1billion,” a finance department spokesperson commented by email.

However, the point may be moot before it ever comes to court, another reason Ireland is so irritated by the EU action. “I think Ireland will continue to work on getting those procedures in place as soon as possible, then this referral by the European Commission becomes redundant,” said Andrew Quinn, Dublin-based tax partner at international law firm Maples and Calder.

One reason Ireland decided to reject the apparent €13bn bonanza mandated by the EU was to reassure foreign investors of its support if its tax laws were challenged. Mr Quinn pointed out that FDI into Ireland has increased since Ms Vestager’s 2016 ruling. “The Apple case demonstrates that Ireland will defend its position where it is clear on its legal position, despite considerable pressure to accept the European Commission decision both in Ireland and from the Commission,” he said.

Next up is Luxembourg, which Ms Vestager ruled must recover €250m in allegedly illegal state aid from Amazon. “Our work is by no means done,” she added.