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For non-EU readers, note that taxation is explicitly not a competency of the EU (i.e. Ireland can set its tax levels to whatever it wants). The only thing in qu

For non-EU readers, note that taxation is explicitly not a competency of the EU (i.e. Ireland can set its tax levels to whatever it wants). The only thing in question here is whether it was applying the same taxation rules to all companies, as granting special exceptions to certain companies could be viewed as state aid (which is not allowed). Ireland claimed it wasn't, the current (over-)ruling says otherwise. This case is also specific to tax rules from many years back. AFAIK the rules have subsequently been tightened and the exemption no longer exists.

tiffanyh 2y ago
What’s interesting is that it’s common for governments to give tax incentives to companies that will result in driving more economic value for their region. Eg Ireland might give a tax incentive if a large Fortune 500 company hires X people in Ireland. Question: does this ruling prohibit that common practice?
- afiori 2y ago
  No, it just requires for the rule to exist and be used coherently.
- dtech 2y ago
  Yes, that is exactly the kind of thing that Ireland did and is not allowed in the EU rules. You are allowed to make rules, but you can't offer deals.
- jemmyw 2y ago
  Kind of. It's already prohibited, depending on what you mean. It would be legal to say all companies can have a tax break if they hire X people in Ireland. It's not legal to give the tax break to one company and deny it to another.
  - noirbot 2y ago
    It does feel a little weird then that Apple is being fined here then? It seems like Ireland did the thing that's against the rules by offering the deal, not Apple? Obviously they worked on it together, but it feels odd that Ireland has now essentially gotten all the benefits of offering this illegal deal by having Apple do business there and now also gets all the back taxes that Apple probably wouldn't have paid to Ireland if they hadn't gotten the deal. That seems like a bit of a perverse incentive for countries to offer deals they may know will get overturned later because they'll get the money eventually.
    - tiffanyh 2y ago
      That's exactly why I asked. If the government approached Apple, to offer them a special (specific to Apple) tax deal in exchange for X ... why is Apple now being held accountable for Ireland doings.
      - ko27 2y ago
        Because in this area, EU has rule of law, not Ireland.
        com 2y ago
        I don’t think that rule of law means what you think it does.
        projektfu 2y ago
        More helpfully, you probably mean EU law supersedes Irish law in this area.
      - pyrale 2y ago
        Because accepting a corruption bargain is as illegal as offering it.
        tiffanyh 2y ago
        "Corruption" is a strong word here. Tax Abatements are a long, well understood practice that's been leveraged by city/state/federal governments for decades to incentivize desired outcomes. Look at Electric Vehicles (EV's) Both California and Federal government were giving tax incentives for individuals who purchase an EV. This tax abatement was used to incentivize the adoption of EV's. Is that "corruption? Absolutely not.
- NoboruWataya 2y ago
  There is a general prohibition on EU member states granting state aid to companies, but there are exceptions to this where the aid is justified in order to promote economically underdeveloped regions. There are a lot of rules and court cases about when state aid will fall on one side or the other of that line. See eg https://competition-policy.ec.europa.eu/state-aid/legislation/modernisation/regional-aid_en https://competition-policy.ec.europa.eu/state-aid/legislatio...
  - n_plus_1_acc 2y ago
    You Seen knowledeble on this topic. What do you think of the numerous Deutsche Bank and Lufthansa aids?
    - realityking 2y ago
      I don’t think Deutsche Bank has ever received direct state aid, they’re quite proud of that fact. Though they have benefitted indirectly when institutions that owed Deutsche Bank money received state aid. Lufthansa did receive state aid during the pandemic. This is currently under investigation as the EU’s approval was annulled by an EU court: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_3662 https://ec.europa.eu/commission/presscorner/detail/en/ip_24_...
      - hnbad 2y ago
        To be clear: Germany also heavily subsidized a lot of other large companies, especially in the automotive industry during the pandemic but the politicians involved were mostly smart enough to hide this behind grants with tailor-made requirements that only incidentally happened to perfectly match those companies and few else.
        realityking 2y ago
        At least VW and BMW have certainly received state aid in the past, mostly around opening new factories, but I can’t find anything where they got specific aid during Covid. Of course they were able to use support that’s open to all companies, e.g. Kurzarbeit, but that’s not considered state aid in the EU context.
- pyrale 2y ago
  > Eg Ireland might give a tax incentive if a large Fortune 500 company hires X people in Ireland. If Ireland is willing to give the same tax incentive to any company hiring X people in Ireland, it's fine. If Ireland only grants the rebate to Fortune 500 companies in a bid to lure specific US investment, it's the state creating a competitive distortion i.e. state aid.
  - margana 2y ago
    Unless the threshold is set high enough that only a few corporations could even possibly do it. Especially if they limited it further per industry.
- chrisdhoover 2y ago
  Ireland was a poor country. They recognized low taxes would attract business. It worked. They then became a “tiger”
vasco 2y ago
I think you make it seem like EU doesn't care at all about what member states do in regards to taxation but there's many limitations to what can be done by any member state in order to harmonize and prevent corruption etc. This in practice makes the EU have a lot of say in regards to taxation. Moreover the EU has special rules to limit moving funds to jurisdictions that have taxes that are deemed too low (read tax havens) - this directly implies no member state has agency to lower their own taxes as much. Here's some example limitations: https://eur-lex.europa.eu/EN/legal-content/summary/tackling-corporate-tax-avoidance.html?fromSummary=21 https://eur-lex.europa.eu/EN/legal-content/summary/tackling-... I focused on direct taxation, but in indirect taxation I think there's even more examples.
- hinkley 2y ago
  Maybe they should do it like Roth IRAs. You can move the money to a tax haven only after you’ve paid taxes on it. So if you’re building hotels or factories in the haven that’s fine. If you’re hiding money we demand our pound of flesh.
  - The_Colonel 2y ago
    It's more difficult to determine where the value in software is being created. Still, big tech has a lot of R&D offices in Ireland.
    - hinkley 2y ago
      That is definitely a difficult paper trail. If you make valves in Ireland they at least have to be shipped. Code just moves on the network. As do commands. But wouldn’t Ireland see their taxes as “working” if Irish coders are being hired to do the work?
      - yunohn 2y ago
        There’s absolutely no employment requirement outside of any PR deals that IE may impose on Apple to satisfy their citizens. The tax evasion scheme they used does not necessitate any real humans in any jurisdictions - it’s almost literally just documentation.
HWR_14 2y ago
Brilliant of Ireland. They get the Apple (and Google and Microsoft, etc.) business with low tax rates, thus bringing a lot of money into Ireland. Worst case scenario, a decade later some 3rd party they cannot be blamed for gets them billions more. I agree with your recollection. AFAIK the rules were changed years ago.
jwildeboer 2y ago
It’s a final ruling. Not a current (over-)ruling as you paint it. This is a decision from the European Court of Justice. No appeal possible. The 13B€ are already in an escrow account and will now be released.
- anonymousDan 2y ago
  What? It overruled a previous ruling from a lower court (which I believe in turn overruled an initial rulin in the other direction!)
- mig39 2y ago
  The person you're replying to used (over-)ruling as in it was overruling a previous decision of another court.
mytailorisrich 2y ago
No, EU states cannot set their tax levels to whatever they want. The EU imposes minima to at least corporation tax and VAT.

tiffanyh 2y ago

What’s interesting is that it’s common for governments to give tax incentives to companies that will result in driving more economic value for their region. Eg Ireland might give a tax incentive if a large Fortune 500 company hires X people in Ireland. Question: does this ruling prohibit that common practice?

afiori 2y ago
No, it just requires for the rule to exist and be used coherently.
dtech 2y ago
Yes, that is exactly the kind of thing that Ireland did and is not allowed in the EU rules. You are allowed to make rules, but you can't offer deals.
jemmyw 2y ago
Kind of. It's already prohibited, depending on what you mean. It would be legal to say all companies can have a tax break if they hire X people in Ireland. It's not legal to give the tax break to one company and deny it to another.
- noirbot 2y ago
  It does feel a little weird then that Apple is being fined here then? It seems like Ireland did the thing that's against the rules by offering the deal, not Apple? Obviously they worked on it together, but it feels odd that Ireland has now essentially gotten all the benefits of offering this illegal deal by having Apple do business there and now also gets all the back taxes that Apple probably wouldn't have paid to Ireland if they hadn't gotten the deal. That seems like a bit of a perverse incentive for countries to offer deals they may know will get overturned later because they'll get the money eventually.
  - tiffanyh 2y ago
    That's exactly why I asked. If the government approached Apple, to offer them a special (specific to Apple) tax deal in exchange for X ... why is Apple now being held accountable for Ireland doings.
    - ko27 2y ago
      Because in this area, EU has rule of law, not Ireland.
      - com 2y ago
        I don’t think that rule of law means what you think it does.
      - projektfu 2y ago
        More helpfully, you probably mean EU law supersedes Irish law in this area.
    - pyrale 2y ago
      Because accepting a corruption bargain is as illegal as offering it.
      - tiffanyh 2y ago
        "Corruption" is a strong word here. Tax Abatements are a long, well understood practice that's been leveraged by city/state/federal governments for decades to incentivize desired outcomes. Look at Electric Vehicles (EV's) Both California and Federal government were giving tax incentives for individuals who purchase an EV. This tax abatement was used to incentivize the adoption of EV's. Is that "corruption? Absolutely not.
NoboruWataya 2y ago
There is a general prohibition on EU member states granting state aid to companies, but there are exceptions to this where the aid is justified in order to promote economically underdeveloped regions. There are a lot of rules and court cases about when state aid will fall on one side or the other of that line. See eg https://competition-policy.ec.europa.eu/state-aid/legislation/modernisation/regional-aid_en https://competition-policy.ec.europa.eu/state-aid/legislatio...
- n_plus_1_acc 2y ago
  You Seen knowledeble on this topic. What do you think of the numerous Deutsche Bank and Lufthansa aids?
  - realityking 2y ago
    I don’t think Deutsche Bank has ever received direct state aid, they’re quite proud of that fact. Though they have benefitted indirectly when institutions that owed Deutsche Bank money received state aid. Lufthansa did receive state aid during the pandemic. This is currently under investigation as the EU’s approval was annulled by an EU court: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_3662 https://ec.europa.eu/commission/presscorner/detail/en/ip_24_...
    - hnbad 2y ago
      To be clear: Germany also heavily subsidized a lot of other large companies, especially in the automotive industry during the pandemic but the politicians involved were mostly smart enough to hide this behind grants with tailor-made requirements that only incidentally happened to perfectly match those companies and few else.
      - realityking 2y ago
        At least VW and BMW have certainly received state aid in the past, mostly around opening new factories, but I can’t find anything where they got specific aid during Covid. Of course they were able to use support that’s open to all companies, e.g. Kurzarbeit, but that’s not considered state aid in the EU context.
pyrale 2y ago
> Eg Ireland might give a tax incentive if a large Fortune 500 company hires X people in Ireland. If Ireland is willing to give the same tax incentive to any company hiring X people in Ireland, it's fine. If Ireland only grants the rebate to Fortune 500 companies in a bid to lure specific US investment, it's the state creating a competitive distortion i.e. state aid.
- margana 2y ago
  Unless the threshold is set high enough that only a few corporations could even possibly do it. Especially if they limited it further per industry.
chrisdhoover 2y ago
Ireland was a poor country. They recognized low taxes would attract business. It worked. They then became a “tiger”

vasco 2y ago

I think you make it seem like EU doesn't care at all about what member states do in regards to taxation but there's many limitations to what can be done by any member state in order to harmonize and prevent corruption etc. This in practice makes the EU have a lot of say in regards to taxation. Moreover the EU has special rules to limit moving funds to jurisdictions that have taxes that are deemed too low (read tax havens) - this directly implies no member state has agency to lower their own taxes as much. Here's some example limitations: https://eur-lex.europa.eu/EN/legal-content/summary/tackling-corporate-tax-avoidance.html?fromSummary=21 https://eur-lex.europa.eu/EN/legal-content/summary/tackling-... I focused on direct taxation, but in indirect taxation I think there's even more examples.

hinkley 2y ago
Maybe they should do it like Roth IRAs. You can move the money to a tax haven only after you’ve paid taxes on it. So if you’re building hotels or factories in the haven that’s fine. If you’re hiding money we demand our pound of flesh.
- The_Colonel 2y ago
  It's more difficult to determine where the value in software is being created. Still, big tech has a lot of R&D offices in Ireland.
  - hinkley 2y ago
    That is definitely a difficult paper trail. If you make valves in Ireland they at least have to be shipped. Code just moves on the network. As do commands. But wouldn’t Ireland see their taxes as “working” if Irish coders are being hired to do the work?
    - yunohn 2y ago
      There’s absolutely no employment requirement outside of any PR deals that IE may impose on Apple to satisfy their citizens. The tax evasion scheme they used does not necessitate any real humans in any jurisdictions - it’s almost literally just documentation.

HWR_14 2y ago

Brilliant of Ireland. They get the Apple (and Google and Microsoft, etc.) business with low tax rates, thus bringing a lot of money into Ireland. Worst case scenario, a decade later some 3rd party they cannot be blamed for gets them billions more. I agree with your recollection. AFAIK the rules were changed years ago.

jwildeboer 2y ago

It’s a final ruling. Not a current (over-)ruling as you paint it. This is a decision from the European Court of Justice. No appeal possible. The 13B€ are already in an escrow account and will now be released.

anonymousDan 2y ago
What? It overruled a previous ruling from a lower court (which I believe in turn overruled an initial rulin in the other direction!)
mig39 2y ago
The person you're replying to used (over-)ruling as in it was overruling a previous decision of another court.

mytailorisrich 2y ago

No, EU states cannot set their tax levels to whatever they want. The EU imposes minima to at least corporation tax and VAT.