The European Commission on Sept. 30 published non-confidential versions of its decisions to open state aid investigations into advance rulings granted to Apple in Ireland and Fiat in Luxembourg.
The Apple/Ireland controversy concerns 1991 and 2007 advance pricing agreements entered into by Irish Revenue and of Apple’s Irish branches, Apple Sales International and Apple Operations Europe, EU. Both companies were incorporated in Ireland but were not tax resident in Ireland: the tax residency of the companies was not identified.
The Commission said that evidence, including excerpts of notes taken from meetings between Apple’s tax adviser and Irish revenue authorities, appeared to show that the amount of profit allocated to Irish operations was negotiated rather than set by application of a transfer pricing methodology.
The Commission determined that the Irish rulings did not comply with the arm’s length principle, and accordingly, confer an advantage to Apple which was granted in a selective manner. As a result, the Commission reached the “preliminary view” that rulings of granted to Apple constitute state aid.
The Fiat/Luxembourg decision similarly concludes that a Luxembourg 2012 private ruling may have sanctioned the allocation of too little profit to Luxembourg for the financing activities of Fiat Finance and Trade, the Commission said.
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